Audit Commission
	 — 
	Question

Lord Harrison: To ask Her Majesty's Government how the functions of the Audit Commission will be replaced following its abolition.

Baroness Hanham: My Lords, subject to Parliament enacting the necessary legislation, local audits will be regulated within a statutory framework overseen by the National Audit Office and the audit profession. Councils will appoint their own independent external auditors and there will be new audit arrangements for local health bodies. The commission's in-house audit practice will be moved to the private sector and other functions of the commission will cease or become the responsibility of auditors or other existing bodies.

Lord Harrison: Why, without consultation and at a time of financial retrenchment, do the Government abolish the established Audit Commission, whose value is demonstrated by its extracting value for money when public money is spent on the National Health Service and in the local authority sector? Does the Minister agree with the ACCA and with CIPFA that what will happen if we give this to private audit firms is that there will be many more conflicts of interest; that often they will have no appetite to take up the work; and worst of all, that the independent voice of the Audit Commission, which was able to criticise government, will be lost? Has not the pretty Mr Pickles got the Government into yet another pretty pickle?

Baroness Hanham: My Lords, in the current financial climate, it makes absolutely no sense for Whitehall to own the fifth largest audit practice in Britain, particularly when it provides services that can readily be obtained in the private sector. The commission's monopoly on appointing local auditors weakens competition and also weakens the localism that should be available to local government. Certainly in my time in local government, one of the things that irritated me most was the fact that you could not choose your own auditors. Now there will be much better and more open ways of doing that.

Lord Christopher: My Lords, I declare a past interest in that I have been a member of the Audit Commission. The noble Baroness has said exactly the opposite of what the noble Baroness, Lady Thatcher, said when she was Prime Minister in 1981 and set up the Audit Commission in 1982. I quote Mr Pickles when he said:
	"I'm not interested in research and evidence-I'm here to take decisions".
	We know the basis on which this decision has been taken. If the noble Baroness, Lady Thatcher, was wrong, how, according to what the Minister has described, do the Government aim to take forward the then three aims of the noble Baroness, Lady Thatcher-namely, to raise and maintain the quality of audit, to increase cost-effectiveness, and, above all perhaps, to get value for money? How will each of those aims be advanced?

Baroness Hanham: My Lords, 1981 was quite a long time ago, just in case that has not been appreciated. Also, since then, the Audit Commission has assumed far greater roles than my noble friend Lady Thatcher ever envisaged it doing. It is now our view that it is time to put audit into the hands of local authorities so that they can demonstrate for themselves that they can choose auditors. Some inspection powers will still be in the hands of Ofsted and the Care Quality Commission to ensure that there is value for money and propriety in those services. Local authorities will have to take a very keen interest in how their services are run, the value they get for the money they pay, and the standards that they achieve.

Lord Greaves: My Lords, it is good to know that this coalition Government are not very Thatcherite. There was rejoicing among local authorities throughout the land when Eric Pickles announced that the Audit Commission was being abolished. The succession of top-down schemes, from best value to the comprehensive performance assessment and the comprehensive area assessment and so on, have wasted vast amounts of time and money in local authorities. Although it will take time to close down the commission, will the Minister confirm that new Labour attempts to micromanage anything on the ground that moves have come to an end and that local authorities can now use their resources to get on and do the jobs that they were elected to do?

Baroness Hanham: My Lords, yes,

Lord McKenzie of Luton: My Lords, the Minister has talked about value for money. Please will she tell the House what impact assessment has been undertaken of the proposals to abolish the Audit Commission and whether she will publish it? In particular, will she say what are the estimated winding-up costs and how long it will be before any savings are anticipated?

Baroness Hanham: My Lords, clearly there will be savings. At the moment, the estimate is about £50 million, but I expect that may vary either up or down. The Audit Commission has appointed Gareth Davies to see how the commission is taken into the private sector, which is an excellent move forward. I look forward to seeing how that goes and the Audit Commission's proposals for the future.

Lord Tebbit: My Lords, without regard to the merit of this particular decision, does my noble friend agree that we should look rather closely at the record of the major accountancy and audit firms in this country? After all not one of them detected anything wrong with any of the bank accounts which they audited. [Laughter.]

Baroness Hanham: My Lords, nor did the previous Government. They missed that, as well as the audit companies. The private sector can only be strengthened by having another major audit company within it and the Audit Commission will, I hope, become that. There will then be a wider market for local authorities to delve into for audit.

Lord Barnett: My Lords, given the various new bodies that will carry out the functions previously done by the Audit Commission, can the Minister say whether, before abolishing the commission, any estimate will be made about the increased or reduced cost and how that will help to do the job of auditing?

Baroness Hanham: My Lords, clearly there is more work to be done. The announcement has been made quickly so that there is no hold up or detriment to the Audit Commission. As I have said, at the moment the calculated savings are £50 million, so presumably that will also include other work to be done.

Pakistan: Child Welfare
	 — 
	Question

Baroness Massey of Darwen: To ask Her Majesty's Government how their development policies support child welfare in Pakistan.

Baroness Verma: My Lords, I pay tribute to the noble Baroness, Lady Massey, for all the hard work she does in ensuring that the welfare of children across the world is raised continuously. The UK Government's development programme promotes child welfare in Pakistan in several ways. Our support in education will help 5 million more children to attend primary school by 2013. Our support to the national health facility has helped to save 200,000 children's lives, stopped 800,000 children from becoming malnourished and prevented 15,000 mothers from dying. Our humanitarian support after the recent flooding has provided more than half a million malnourished children with food supplements.

Baroness Massey of Darwen: I thank the noble Baroness for her kind words and for her response. In doing so, I declare an interest as a trustee of UNICEF UK. How are those efforts by so many organisations in Pakistan being co-ordinated with respect to children's welfare?

Baroness Verma: My Lords, the UN is responsible for co-ordinating the international humanitarian response. All of DfID's humanitarian aid is directed through UN agencies or established NGOs, in line with standard humanitarian practice. Each key area-health, water, sanitation, shelter and food-has a separate cluster, with members including the Government of Pakistan, various UN agencies, NGOs, DfID and other donors. Members, including officials from the Department for International Development, meet regularly to share information within and across clusters to ensure a co-ordinated and efficient response. The Secretary of State said in his ministerial Statement on 12 October that the "scale and shifting patterns" of the crisis make it a challenging situation.

Lord Chidgey: My Lords, although I thank my noble friend for that response, is she aware that in the 12 months before the flooding in Pakistan, the infant mortality rate rose for the first time for seven years, by 7 per cent? Are the Government's plans for child welfare aimed at reversing that trend, which is obviously alarming, as well as coping with the additional challenges caused by the recent flooding?

Baroness Verma: My Lords, I thank my noble friend for that important question. DfID is supporting female health workers in Pakistan. We have supported health workers through the national health facility, providing nutritional advice and distributing supplements to pregnant women, adolescent girls and children. At the UN summit, the Deputy Prime Minister and the Secretary of State made a further commitment to ensuring that the lives of 50,000 more women are helped to be saved by providing additional nutrients and nourishing meals, as well as making sure that facilities are in place in the health service.

Lord Foulkes of Cumnock: My Lords, can the Minister give this House an assurance that no money in the budget of the Department for International Development for Pakistan or any other country will be used in future for purposes currently funded by the defence department?

Baroness Verma: My Lords, all of DfID's funds are in line with the strict guidelines of the OECD.

Lord Elton: My Lords, is the funding of which my noble friend speaks delivered to the eventual beneficiary by agencies of the Government of Pakistan, by voluntary agencies or by other means-and, if so, what means?

Baroness Verma: I thank my noble friend for that question. All humanitarian aid is given through NGOs, but DfID government programmes go through a number of organisations, and some go through the Pakistan Government.

Lord Brett: My Lords, in pursuance of the previous question, while appreciating the efforts that have been made internationally, UNICEF and a number of NGOs have been very critical about the efficiency and speed with which aid is getting through to those most in need. Given the Government's previous assurances, how in their present endeavours are they ensuring that that is improved in the coming months, particularly in the light of the flooding disaster?

Baroness Verma: My Lords, I am sure that the House agrees that it has been a disaster on a huge scale. We are looking to ensure that our response is in line with that of other agencies. It is a really big disaster. All that I can say to reassure the noble Lord is that we will play our part at the forefront; we in DfID will do our very best to help all other agencies.

Viscount Slim: My Lords, there is some good news in Pakistan. I declare an interest in that I am heavily connected to 17 eye hospitals throughout Pakistan. At this stage, we have probably restored sight, given succour and repaired the eyes of 2 million Pakistanis, and a large percentage of them are children. The problem is the lack of hygiene in the villages. The dirt affects the eyes. In this instance, the money is getting to the right people, and the Pakistani surgeons are of the highest quality.

Baroness Verma: My Lords, I congratulate the noble Viscount on all the hard work he does. We recognise that a lot of good work is being done, but the department is reviewing its bilateral and multilateral aid to make sure that where our aid is being used, it is being used to the best possible advantage.

The Earl of Listowel: My Lords, does the Minister agree that it is important that women are not only the recipients of aid but are also drawn as far as possible into the political processes? Does she look, for instance, to the example of the work of CARE International? Will she use her department's influence and example as far as possible to ensure that women are fully drawn into any discussions in this area?

Baroness Verma: I thank the noble Earl. As he is aware, we have put women and the empowerment of women at the heart of our priorities. We will work very closely with other departments and nations to ensure that women are at the forefront of decision-making whether in the political process or at civic level, which is also key to ensuring the empowerment of women and girls.

Israel: Illegal Settlers
	 — 
	Question

Lord Wright of Richmond: To ask Her Majesty's Government what assessment they have made of the Government of Israel's continued refusal to remove illegal settlers from the West Bank and East Jerusalem; and what action the European Union is taking to help resolve this problem.

Lord Howell of Guildford: My Lords, all settlement activity in the Occupied Palestinian Territories is illegal and represents an obstacle to peace. We have consistently pressed Israel to renew its settlement moratorium and are very disappointed that it has not yet done so. My right honourable friend the Foreign Secretary delivered this message to Israeli Foreign Minister Lieberman on 27 September and reiterated it on 6 October. The European Council also set this out in its statement on 16 September.

Lord Wright of Richmond: I am grateful to the Minister for that reply. Is he aware that as of June this year up to 200 housing units were under construction that started construction while the so-called moratorium was in place? They add to the 2,000 building units that started before the moratorium and continued right through it to this day. Does the Minister recall that in 1982, after the Israelis invaded Lebanon, the Conservative Administration, of which he was a member, imposed a ban on all British arms to Israel until the invasion was reversed? Will he consider with our European partners a similar ban on an EU-wide basis until a genuine moratorium is put in place and the Israeli Government start to remove illegal settlers from the West Bank and East Jerusalem?

Lord Howell of Guildford: I totally share the noble Lord's correct frustration and dismay that the building activity has gone on even during the moratorium and is probably continuing at this moment in a highly provocative way. We regard that as illegal.
	As to embargoes and export restrictions, we take the view that the total isolation of Israel would be a backward, not forward, step in this painful process. We fully agree that pressure must be mobilised. As far as an arms embargo is concerned, we have very tight, rigorous and effective consolidated EU and national export licensing criteria, which we employ. These work very effectively. As the noble Lord indicated, any further ban on development would have to be not merely EU-wide but virtually worldwide. We think that the isolation route is not the right one except, of course, for the crucial issues that I mentioned that are under very tight licensing control.

Lord Janner of Braunstone: Does the noble Lord accept that Israel is the only democracy in that area and, like our own, it does not always elect a Government with whom we agree? Some of us do not agree with our present Government in some matters and that is certainly the view of those on this side of the House. Does the noble Lord agree that the EU should keep working with the quartet and the US to encourage the Israelis and the Palestinians to make peace through negotiations and that reprimanding either side is counterproductive to producing the result which we all would like to see?

Lord Howell of Guildford: On the general proposition, obviously, yes, we desperately want to see peace between Israel and Palestine and we want to see the negotiations resumed and continued. But where we are asked to use our good offices and where we want to bring influence to bear, it seems perfectly reasonable to point out in what the noble Lord calls a reprimand that certain actions taken by either side may be going the wrong way. One thing that is going the wrong way is provocative settlements continuing in occupied territories, which must be setting these negotiations back. That is a reasonable proposition to put forward even to those who recognise fully the needs and the right of Israel to secure its proper security.

The Lord Bishop of Chester: My Lords, at what point does the extent of the settlement activity, particularly in the West Bank, render the two-state solution an impractical aim?

Lord Howell of Guildford: Behind the right reverend Prelate's question is a fear which I and many share. There could come a point when there is so much building and intrusion that it cannot even be contemplated as part of the swap of lands or anything else in a final negotiation. This reinforces our determination to bring to bear on the Israelis the necessity of continuing the moratorium on new building and to realise that in the eventual negotiation settlement this matter has got to be reasonably settled so that there can be a viable Palestinian state.

Lord Pannick: My Lords-

Lord Lea of Crondall: My Lords-

Baroness Miller of Hendon: Does any assessment made by the Government take into account the fact that these settlements provide a haven from which Hezbollah and Hamas cannot continually throw bombs and things across into Israel, as has happened since Israel gave up control in Gaza?

Lord Howell of Guildford: There are security dangers in all these developments. Obviously, attacks on Israel from Hezbollah and from rocketing from Hamas in Gaza are matters that make it more difficult for the negotiations to go ahead. These two are deplorable developments and they must cease if we are to make progress.

Lord Lea of Crondall: My Lords-

Lord Phillips of Sudbury: My Lords-

Lord Pannick: My Lords-

Lord Strathclyde: My Lords, if both noble Lords are quick, I am sure that my noble friend will be able to give an answer-first, the noble Lord, Lord Lea, and then the noble Lord, Lord Pannick.

Lord Lea of Crondall: Does the Minister agree with the point being put to our friends in the Israeli Government that public opinion in this country and much of western Europe is influenced by the fact that there were two sides to the Balfour declaration? One is creating a homeland for the Jewish people and the other is observing the rights of the Palestinian people.

Lord Howell of Guildford: My noble friend is urging short answers, so the answer is yes, of course there are two sides.

Lord Phillips of Sudbury: My Lords-

Lord Pannick: My Lords, does the Minister agree that a more fundamental obstacle to a peace settlement than the settlements in the West Bank, which occupy some 5 per cent or so of that territory, is the failure of Arab states to introduce into their own countries the rule of law and the right to freedom of expression which would promote a real debate in those countries about the true interests of the unfortunate Palestinian people?

Lord Howell of Guildford: The noble Lord is of course right that the issue of settlements is difficult. It is not the only issue and there are many broader considerations on which he has quite correctly touched.

Baroness Symons of Vernham Dean: My Lords-

Lord Phillips of Sudbury: My Lords-

Lord Strathclyde: My Lords, I feel that we need to go to the next Question.

Government Efficiency: Sir Philip Green's Report
	 — 
	Question

Lord Eatwell: To ask Her Majesty's Government what is their response to Sir Philip Green's report on government efficiency, published on 11 October.

Lord Taylor of Holbeach: My Lords, as Mr Francis Maude, the Minister for the Cabinet Office, said on Monday, Sir Philip Green's findings clearly demonstrate the scale of inefficiency and waste present in the system today. It is clear that there is a huge opportunity and a real willingness on behalf of civil servants to take on the important task of delivering efficiency. We welcome the sense of urgency that Sir Philip has brought to this work and are looking at how we can best take forward key recommendations.

Lord Eatwell: My Lords, I thank the Minister for that reply. Is he aware that we on these Benches welcome many of the conclusions in Sir Philip Green's report? It is the latest in a long line of similar initiatives, such as those in the report of Sir Derek Rayner in the 1980s which uncovered gross inefficiencies in the Government of the noble Baroness, Lady Thatcher, and in the work of Sir Peter Gershon for the Labour Government, saving many billions more than the Green report identifies. However, we find the key conclusion, emblazoned on the cover of the report, that,
	"The Government is failing to leverage both its credit rating and its scale",
	very disturbing. Translated into everyday language, that amounts to a recommendation that the Government abuse their market power to worsen payment terms and force down supplier prices. Will the noble Lord join me in supporting good practice in business and reject Sir Philip Green's invitation to the Government to abuse their market power?

Lord Taylor of Holbeach: My Lords, I thank the noble Lord for his exposition of the Opposition's position on this matter, but to answer his question, it is true that the Government have failed to leverage their position. Perhaps I may give an example that in fact stems from the previous Government, energy, which is a very good example of what can be achieved by using leverage. The purchase of 75 per cent of electricity and gas requirements has been centralised in an expert team, resulting in cumulative savings of £500 million. That is a substantial sum and something worth achieving.

Lord Martin of Springburn: My Lords, I do not doubt that the senior officers of both Houses will be looking at efficiencies for this great historic building of ours. Can I ask for assurance that, in doing so, we never reduce the standard of security? I ask this not for selfish reasons, but because we have a dedicated staff of thousands of people here, as well as thousands of visitors. We owe it to them to make sure that security is not loosened in any way because of so-called efficiencies.

Lord Taylor of Holbeach: My Lords, I think I can reassure the noble Lord on that point because I have read Sir Philip's recommendations, and there is no recommendation on security matters. However, I am sure that the appropriate committee of this House and the other place will make any necessary judgments on these matters.

Lord Maclennan of Rogart: My Lords, do the Government recognise that this headline-catching report is one in a succession of reports following that of Sir Peter Gershon? Some of its recommendations for centralised procurement seem to run counter to the Government's own intentions about the localisation of accountability and to the fact that the greatest savings can be made not in centralised government spending but in respect of spending by the health service, the education sector and other decentralised public bodies? Does he agree that the Government should not rush to judgment in proposing to institute a major, overall purchasing authority, but should consult widely before they do so?

Lord Taylor of Holbeach: My Lords, inevitably, the Government will strike a balance on these matters. They see decision-making as essentially a local issue, but there are opportunities in the centralised negotiation of price.

Baroness Liddell of Coatdyke: My Lords-

Lord Campbell-Savours: My Lords-

Lord Sugar: My Lords, using his own words, Sir Philip says that his findings are nothing more than "common sense", and I absolutely agree with him. He has produced a very good report in the short period of time he had to do it in. But does not the noble Lord agree that it is time to centralise buying and to bring in some kind of head honcho from the private sector who knows what they are doing and pay them the right amount of money, which they would be paid in a large organisation? If you do that, you will end up paying someone a rather exorbitant amount of money that is many multiples of what the Prime Minister earns. However, Sir Philip did admit, in another of his famous statements in the report, that if you pay peanuts, you get monkeys. [Laughter.]

A noble Lord: You're fired!

Lord Taylor of Holbeach: I think the noble Lord is seeking from me the phrase "You're hired", but I fear that is not within my gift. The Government intend to take these proposals forward and the Efficiency and Reform Group is dealing with these matters. There are opportunities: for example, the telephone bill across government is £2 billion. At that level it will be worth the Government buying their own capacity within the telephone service. I am sure that that is the kind of decision the Government will pursue.

Baroness Liddell of Coatdyke: My Lords-

Lord James of Blackheath: My Lords-

Baroness Anelay of St Johns: My Lords, we have reached 30 minutes.

Arrangement of Business
	 — 
	Announcement

Baroness Anelay of St Johns: My Lords, later today, after the debate in the name of the noble Baroness, Lady Massey of Darwen, my noble friend Lord Taylor of Holbeach will repeat a Statement entitled "Public Bodies Reform".

Superannuation Bill
	 — 
	First Reading

The Bill was brought from the Commons, read a first time and ordered to be printed.

Business of the House
	 — 
	Timing of Debates

Moved by Lord Strathclyde
	That the debate on the Motion in the name of Baroness Massey of Darwen set down for today shall be limited to two hours and that in the name of Baroness Wall of New Barnet to three hours.
	Motion agreed.

Human Trafficking
	 — 
	Debate

Moved By Baroness Massey of Darwen
	To call attention to the case for government strategies to tackle human trafficking; and to move for papers.

Baroness Massey of Darwen: My Lords, I am very pleased to have secured this debate today. The 18th of this month is Anti-slavery Day and human trafficking has been described as a modern form of slavery. Indeed, it has many of the features of slavery. Slavery is about power over individuals; it is about degradation and the removal of rights and dignity; it is about loss of personality and self-worth; it also often carries financial gain. All of this applies to the terrible practice of human trafficking.
	I thank noble Lords-not only those in the Chamber today-for the support that they have given on this topic. There have been debates across the House and in another place on trafficking and we should today hope to build on those debates. The noble Baroness, Lady Verma, recently held a useful meeting with representatives of organisations concerned with child trafficking; I am grateful to her for that and for her commitment in this area. I have received more briefings for this debate than I have ever received before. This shows the degree of concern about human trafficking and a commitment to improve systems to deal with this abuse. Many organisations-too many to mention, although I shall draw on their experiences-are doing a remarkable job in their advocacy for and support of trafficked people.
	I declare an interest as a trustee of UNICEF and a patron of the University of Bedfordshire unit on trafficking. All the organisations, often working together, are totally dedicated, but they need recognition and support. I hope that the Minister will be able to offer that recognition and support today.
	I shall begin by offering a few statistics on trafficking and I shall then focus on child trafficking in the UK, surely one of the most abusive and wicked of practices. I shall mention the proposed European directive; I know that many noble Lords are interested in this. I am also aware that noble Lords have a variety of issues that they want to raise and that there is great expertise around the Chamber. I am sorry that the noble Baroness, Lady Ritchie, cannot be present today. She has particular concern and knowledge about the trafficking of children in London, highlighted in a recent Evening Standard report.
	Here are a few statistics. Estimating the number of people trafficked is difficult due to the hidden nature of trafficking. It has been estimated that, globally, the number is 12.3 million, with prosecutions numbering barely more than 4,000 in 2009. In the UK, it is estimated that there are more than 5,000 victims of trafficking and between 100,000 and 800,000 victims in Europe. These were the findings of the House of Commons Home Affairs Select Committee in 2008-09. As we can see, the estimated numbers are diverse and unreliable. It has been estimated that the total economic and social cost of human trafficking for sexual exploitation in the UK was as much as £l billion in 2003. We are talking about huge sums of money, second only to arms dealing. We are talking also about great human suffering and misery, particularly for women and children.
	As I said, I shall focus mainly on the trafficking of children in the UK. This includes for sexual exploitation, including pornography, and for domestic or other employment purposes. These children are sometimes prosecuted through no fault of their own.
	I shall cite a couple of real-life situations that illustrate some of my concerns. In Doncaster, a 15 year-old Vietnamese boy was recently jailed for a year after pleading guilty to helping farm £85,000-worth of cannabis. He was found on the stairs of a house during a police raid. He had been trafficked via France with the promise of a job in a nail factory. He had been working since he was 12. His family wanted him to have a better life in Europe. He had been beaten and threatened. He had realised that he was involved in criminal activity only nine days before his arrest. The magistrates were obliged to give him a custodial sentence of 12 months. The sentence would normally have been three years but was mitigated due to his age and good conduct. The new European directive on human trafficking, which I shall discuss later, contains provisions on the prosecution of victims.
	Another example is a girl of 13 who arrived in the UK from Africa. She was used as an unpaid domestic worker by a couple who knew her family. She was assaulted by the couple on numerous occasions. A member of the public noticed her unusual behaviour and clothing and spoke to her, but the child's story was not believed. She finally turned up at the offices of the local social services department for help. The investigation took a long time, but she was eventually taken into local authority care, with a designated social worker. She then found herself able to disclose the physical and sexual abuse that she had been subjected to. The couple who trafficked her have been prosecuted after a two-and-a-half-year investigation.
	The report from the NSPCC and the University of Bedfordshire, Breaking the Wall of Silence, gives many such examples. I have met young people who have been trafficked and suffered abuse and who have had their passports-where there was a passport-taken from them. They have been prisoners, not allowed contact with the outside world. These young people often have no English and little education. There has been little support, except in enlightened cases, and inadequate accommodation.
	There are provisions to tackle child trafficking in the UN Convention on the Rights of the Child. In 2008, the UK lifted its reservation on Article 22, thus entitling asylum-seeking children the same protection and access to services as other children. The Council of Europe convention of 2008 was the first international treaty to oblige states to adopt minimum standards to assist trafficked persons and protect their rights. Supplementary guidance has been issued to local authorities in England to promote early identification and partnership approaches to the protection of trafficked children. Guidance for safeguarding children at risk from sexual exploitation was revised and published in 2009. The Borders, Citizenship and Immigration Act 2009 places a duty on the UK Border Agency to make arrangements to safeguard and promote the welfare of children.
	Much has been done. There is awareness of the need to protect vulnerable children, but problems remain. Early identification is difficult. Prevention measures are difficult. There are legal entanglements. There is a need for advocacy and key workers. There is a need for visionary co-ordination of services at a local level.
	Barnardo's, which runs 22 services for children and young people at risk of sexual exploitation, found in its research that identification of child victims of trafficking is still very low. Authorities do not seem to have developed adequate procedures and guidelines to improve detection. Barnardo's found a general lack of awareness of child trafficking and its indicators among practitioners. It recommends more specialist services for such young people and the provision of a safe and trusted environment where they could disclose abuse and be helped. That would include safe accommodation.
	ECPAT, an umbrella organisation on trafficking, is running, with the Body Shop, a campaign to promote effective guardianship of trafficked children. It has identified gaps in independent monitoring, inadequate legal advice and representation, and a lack of people to co-ordinate the agencies working with children and understand the wishes and needs of children. The agency Stop the Traffik has launched many campaigns, one in conjunction with Cadbury, Nestlé and Mars, to improve education about trafficking and local initiatives such as work with the police.
	Initiatives are happening. However, the Anti-Trafficking Monitoring Group report Wrong Kind of Victim? suggests that the UK's anti-trafficking measures are not fully compliant with the Council of the Europe convention of 2008 in relation to child trafficking in its obligations of protection and prosecution. That needs investigation along with the proposed European directive. Organisations working in the field of human trafficking need a firm and sympathetic lead from the Government to underline their efforts. How will the Government do that? Who will examine the different facets of trafficking?
	There is still much to tackle. All the reports that I have read make a series of clear recommendations, none of which seems to be impossible to implement. Many simply mean a change of practice, such as assessments based on the best interests of the child, benefit of the doubt about issues such as age assessment, safeguarding by the provision of a dedicated key worker, systems to support the child, adequate accommodation-not distant and often unsafe bed and breakfast accommodation-the storing and sharing of information in local authorities and the use of the national referral mechanism to ensure that different forms of trafficking are considered and that cases can be identified at different stages. As someone said, trafficking is a process, not an event. Adequate time is needed to allow for counselling of young people under the age of 18 to disclose their circumstances if they are seeking asylum. The prosecution of child victims such as the example that I gave needs to be reassessed.
	The coalition Government have indicated that they will not opt in to signing the proposed European directive on trafficking in human beings. Will the Government reconsider? I know that there has been confusion about the directive and between the meanings of the various conventions. Rather than getting into that confusion here, I suggest a meeting between Ministers, interested NGOs and parliamentarians to get total clarity on these directives and conventions. The organisation CARE points out that the European directive would add support to trafficked persons in relation to the non-prosecution of victims, assistance and support for victims such as in medicine or accommodation, special representatives in court for children, mandatory review of the results of anti-trafficking policies and assessment of trends.
	This is not a party-political issue but an issue of moral imperative. I know that the Minister is sympathetic, but what will he and the noble Baroness, Lady Verma, do next? The problem of trafficking is complex, but we cannot stand by and see unaddressed inadequacies in our systems to convict perpetrators and protect victims. I look forward to the debate and the Minister's response. I beg to move.

Lord Luke: My Lords, I congratulate the noble Baroness, Lady Massey, on securing this most important debate on human trafficking and on her wide-ranging speech. Given that it is one of the most ancient and lucrative criminal activities in the world, it is with the utmost urgency that we in the United Kingdom do our best to combat modern slavery. As the other place takes note of anti-slavery day today-I think that it is today-so do we with this timely debate. We in this country have a tremendous record in abolishing the slave trade and slavery in the early 19th century, so it was a proud moment for me as a Conservative Member of your Lordships' House to see the Anti-Slavery Day Bill passed into law before the general election this year. Anthony Steen's Private Member's Bill not only codifies recognition of our anti-slavery history, but also stimulates the general public to address this most significant issue.
	As emphasised by the noble Baroness, the figures concerning this subject are appalling. More than 800,000 people are trafficked across borders every year. Furthermore, as she said, 12.3 million adults and children are in forced labour, bonded labour and forced prostitution worldwide. Human trafficking is tied with the illegal arms industry and is the second largest criminal industry in the world today-and, sadly, is also the fastest growing. Effective tackling of the global modern slavery trade would, of course, substantially diminish the $32 billion annual turnover for the traffickers. Would the Minister explain the Government's strategy at least to contain this enormous criminal industry, particularly in the field of traffickers of prostitutes aimed to take advantage of the 2012 Olympics and the large number of people coming over to watch that?
	Human trafficking is not only of criminal benefit to traffickers but also a human disaster. One in six sexually exploited children and young people with whom Barnardo's is currently working appear to have been trafficked within the United Kingdom. The August 2010 report from the Association of Chief Police Officers on Project Acumen found that of 30,000 women involved in off-street prostitution, 17,000 were migrants. Through not fighting human trafficking effectively, we are destroying children's lives in the UK and fuelling our off-street sex trade. Can the Minister detail what the Government are doing to break the cycle of human trafficking to sexual slavery?
	I mentioned the role of Barnardo's in caring for young people affected by human trafficking. This is just one of a number of righteous organisations working together to fight human trafficking. I must mention the Legatum Institute, which briefed me, and Stop the Traffik, which does great work in this field.
	I hope that the Minister is able to explain how the Government intend to work with community organisations to combat modern-day slavery. The previous Government have left us with a terrible economic legacy, doubling the national debt and leaving us with the biggest deficit in the G20. Nevertheless, we should not allow this to exclude us from our crucial global role in counteracting this vile practice. Improving our response to modern-day slavery should not be excluded on cost grounds. We must improve our agencies and redouble our efforts not only to tackle organised international groups who profit from these crimes but to identify and protect victims. I look forward to the other speakers and of, course, to my noble friend's response to this very worthwhile and important debate.

Lord Avebury: My Lords, I, too, welcome the opportunity that the noble Baroness, Lady Massey, has afforded us of considering what has been done already to deal with the horrible crime of human trafficking and what still needs to be done. She made useful suggestions on that, and I agree with her wholeheartedly that it is wrong in principle to prosecute child victims of trafficking for minor offences such as having the wrong documents. I certainly hope that the noble Lord will give a favourable answer to the suggestion made by the noble Baroness that this offence be struck out, because it seems to me outrageous that children are spending time in custody when they had no other means of getting into the United Kingdom than the use of false documents, as many asylum seekers do.
	I also welcome what the noble Baroness said about the European directive. I agree that it would be useful to have a meeting with the Minister to discuss the arguments that have been rehearsed in both Sub-Committee E and Sub-Committee F on what we should be doing about this directive. If it is possible for the noble Lord to say that he would agree to that meeting, I would be very grateful.
	We have come a little way since the chairman of the Home Affairs Select Committee in another place remarked, on producing his report of May 2008:
	"we have no good information on the scale of the problem, enforcement is patchy, prosecution rates are low and there is little protection for victims".
	There has been a bit of an improvement since then, although we are still looking at the tip of the iceberg. The Select Committee said that on a conservative estimate, as has been mentioned, there were 5,000 victims of trafficking-of whom only a fraction have been identified-while the number of arrests as a result of the work of the Child Exploitation and Online Protection Centre in 2009-10 reached a respectable total of 417. Yet there were only 73 convictions of traffickers in the latest three-year period for which figures are available.
	One reason it has been so difficult to get convictions is that the prosecution has to prove double intent: first, that the offender was moving the victim across a national border and, secondly, doing so to exploit that person here in the United Kingdom. Because of this difficulty, the CPS often charges the trafficker with a lesser offence such as living off immoral earnings, which is easier to prove, but that sentence may be so short that the offender is out before the victim's immigration status has been determined. Does the Minister think it would be possible to expand the definition of the trafficking offence so that it was only necessary to prove that the victim was not lawfully in the UK, not that the accused had been concerned in unlawfully bringing the victim here?
	The noble Lord, Lord Luke, mentioned Barnardo's, and I, too, pay tribute to its work. It published the very useful report, Whose child now?, on what is known about the practice of moving a child around the UK or from town to town for the purposes of sexual exploitation, a crime punishable by up to 14 years' imprisonment under Section 58 of the Sexual Offences Act 2003. This crime is recognised as trafficking in the UK action plan and covered in the remit of the HTC. Since that penalty is the same for a child trafficked from another country, it gives the prosecution an alternative charge where it is easier to prove that the trafficker was responsible for the move within the UK, rather than for the original trafficking from overseas. Is the HTC building up a database of cases that can be referred to by the police and the CPS to help them decide what is the most appropriate charge?
	In the Government's response to the sixth report of the Home Affairs Select Committee last August, they said that the HTC would continue to improve its role as a central point for the collection and analysis of data through its responsibility as the national referral mechanism. This process requires that a suspected victim of trafficking is referred to a competent authority for a decision on whether he has been correctly assessed, and the HTC not only provides the central co-ordination and expertise to combat trafficking but is also one of the two main agencies acting as a competent authority. It is dealing with a steadily increasing number of cases expeditiously and, of the 543 decisions in the year to 30 March 2010, two-thirds were accepted.
	There does not appear to be an appeal procedure against a decision not to accept an individual as trafficked; the Minister will correct me if I am wrong, but presumably that question will be dealt with in the course of an appeal against refusal of leave to remain. Alternatively, the refused victim may wish to return to his or her country of origin, and I would be grateful if the Minister would confirm that if the victim was under 18, he would get financial assistance from the IOM under their AVRFC scheme. Also, why should adult victims of trafficking not be eligible for the same benefits? Will the Minister give us any information about the fate of the 192 who were not accepted in the year to 31 March?

Baroness Butler-Sloss: My Lords, I thank the noble Baroness, Lady Massey, for initiating such an important debate so close to anti-slavery day, which is next Monday. I also want to add to the congratulatory words of the noble Lord, Lord Luke, about Anthony Steen for the tremendous work that he did in combating human trafficking during a large part of the period that he spent as a Member of the other House. I declare an interest as co-chairman of the All-Party Parliamentary Group on Human Trafficking and a trustee of the Human Trafficking Foundation.
	We all have concerns, which have already been expressed, about the extent of human trafficking in the United Kingdom and the failures to deal effectively with it. The Metropolitan Police, however, have done some extremely good work, although police work across the country is patchy. I congratulate the Metropolitan Police on a recent operation in east London in conjunction with Redbridge Council on 12 October, where they removed 28 Roma children believed to be victims of a Roma gang of child traffickers. There are major Roma gangs working this country.
	Trafficking, as noble Lords will know, is big business; your Lordships might be interested to know that it is worth as much, or nearly as much, as drug trafficking, and begging is more profitable than prostitution. My concerns are particularly about children and young people trafficked not only for prostitution but for begging and forced servitude, and the lack of sufficient help for these young people.
	I want to raise several issues for the Minister's consideration. First, I am concerned about the operation of the national referral mechanism, the NRM, set up in April 2009. Children who come illegally into the United Kingdom are often identified by safeguarding teams of local authorities or by the police as probably trafficked. They are then referred to the NRM, which makes a separate decision as to whether these young people are trafficked. Sometimes the NRM makes decisions without any input from the local authority or from the police. Between April 2009 and June 2010, 215 children, potential victims of trafficking, were referred to NRM. Twenty-eight were British, 187 from abroad. The largest single group, of 59, was from Vietnam, and the largest type was labour exploitation. In only 77 cases was it decided that the child or young person had been trafficked. Twenty-four were British and 53 were from outside the UK. Many children not accepted by the NRM as having been trafficked are considered by police to have been trafficked. It seems extraordinary that where the police consider a child or young person is likely to have been trafficked, the NRM none the less decides that they are not a victim. There also does not appear to be any appeal process against the NRM decision, which is leading to expensive and time-consuming applications for judicial review of those decisions.
	I was told by a senior police officer this week that when some of these young people appeal to the immigration tribunal against refusal of asylum, police give evidence to the tribunal on behalf of some of them. I have concerns, therefore, about the training of those in the NRM who make these crucial decisions. I ask the Minister to look again at how the NRM is operating, the training of those who make the decisions, and whether weight should be given to the police and safeguarding committee's assessment that a young person has been trafficked. I also ask the Minister what level of support is being given to these 215 young people. Are the police investigating the cases and is there a crime report number for each child referred to the NRM?
	The second matter is one that has been raised by several noble Lords: the prosecution of children and young people who are under the control of traffickers. There was a recent example when three Romanian women, two of them under the age of 18, were convicted and sentenced to prison in Manchester. They had a successful appeal last week. They had been forced by a violent gang into a brothel with other trafficked women and are now giving evidence against the traffickers. The UK Human Trafficking Centre and the Poppy Project both considered that the women were probably trafficked. The fact that they themselves were victims should have been established before the prosecution.
	The largest group of such young people is made up of Vietnamese boys and girls. The noble Baroness, Lady Massey, gave us an example of a case in, I think, Doncaster. These young people are trafficked into this country for labour exploitation-that is, to look after cannabis farms. There are thousands of cannabis farms in private houses around the country, but why on earth are these children prosecuted? I understand that this is a matter for the Ministry of Justice. Will the Minister ask the Ministry of Justice to consider the matter?
	My third point is about support services for children. I, too, am concerned about the Government's decision not to opt in to the directive. The previous Government ought to be congratulated on extending the law on the definition of trafficking to labour exploitation, domestic servitude and forced begging, but these welcome improvements do not go far enough. The most important point that I have raised today is the lack of proper provision for looking after individual children who are found to have been trafficked. There is no special representative, as required by Article 14 of the directive. Various organisations may look after them at different times but there is no one person in charge. There are gaps in the system of care for these children. The Government really cannot say that the existing legislation and procedures are compliant with Article 14. Will the Government look at the pilot project that is just about to start, or has just started, in Scotland?
	Finally, opting in to the directive would focus the Government's mind and show that the UK continues to be a leader in the excellent work that it does in catching and deterring the trafficking gangs. I ask the Government to look again at whether they really want to opt out of the directive.

Lord McColl of Dulwich: My Lords, I, too, congratulate the noble Baroness, Lady Massey of Darwen, on securing this debate. As has been mentioned, the Home Office is reluctant to opt in to the proposed European directive because it says that it will make very little difference to the way that the UK tackles the problem. The Anti-Trafficking Monitoring Group published a paper in June 2010 suggesting that anti-trafficking practice in the United Kingdom is not compliant with key concepts relating to the rule of law itself and, specifically, relating to the principle-identified by the late Lord Bingham-that the question of legal right and liability should ordinarily be resolved by application of the law and not exercised on discretion. This principle seems to be routinely violated in the national referral mechanism, which the noble and learned Baroness, Lady Butler-Sloss, has already mentioned. It is regrettable that in numerous cases the authorities concluded that as the person concerned agreed to come to work in the UK, they could not have been trafficked. However, agreement is often obtained from trafficked persons by means of coercion, threats or deceit, and for this reason, according to the convention, the issue of whether the victim consented is to be treated as irrelevant.
	It is perhaps helpful to consider individual cases so that one can be clear about the difficulties of fighting trafficking. I draw your Lordships' attention to the case of a girl of 13, in Africa, who was trafficked and brought to London, where she was locked in a basement and suffered repeated rape as a child prostitute. After six years of this hell she was considered too old for the clients and so her trafficker released her and provided her with false documents. When she tried to leave the country using those documents she was arrested, convicted and served a 10-month prison sentence. All of us would agree that this is not justice, but, of course, the key question is how we educate and train the relevant organisations so that people on the front line recognise when the person they are dealing with may have been trafficked and respond appropriately. I believe that this is best achieved by opting in. I have received advice from interested parties who believe that, contrary to the Home Office's view, the proposed directive contains greater protection for the victim of trafficking than is afforded under existing law.
	If, as the Home Office believes, the proposed directive merely does what the present law requires, there can be no harm in agreeing to it. If, on the other hand, our present law provides less protection, that is a very good reason for opting in. An example of extra protection is Article 7, which proposes the possibility of not prosecuting a victim who has committed an offence as a direct consequence of being subject to trafficking. Of course, the victim would still have to prove that he or she had been trafficked. This would improve the present system under which the trafficked victim can be subjected to the further trauma and stigma of a criminal trial, albeit that the penalty or punishment may take into account the circumstances. It would be much better by far that no trial should take place if the trafficked person can prove that she or he is trafficked.
	In summary, the proposed directive would build on rather than replicate existing legislation. It is quite clear that the number of criminal proceedings and the number of victims who are assisted remain very low compared with the enormity of the problem of human trafficking. The directive will streamline law enforcement efforts in cross-border cases and may well reduce costs. Provisions that decriminalise victims are urgently required, especially as many victims in the UK continue to be criminalised for offences committed while being deceived or coerced, yet the traffickers often evade criminal responsibility. We must protect victims before, during and after criminal proceedings, especially the children. This is essential to increase prosecution rates and prevent secondary victimisation through this process. The appointment of a rapporteur or independent body should ensure that shortfalls in the system are properly identified.
	Trafficking is a cross-border activity often masterminded by sophisticated criminals. If one can agree a unified system of law to fight this evil trade, it will facilitate co-operation between the relevant enforcement agencies in the countries involved. The proposed directive affords us a chance to agree a unified system and we should take it. The directive would result in a very important change in our law so that rather than putting vulnerable trafficked people through the further trauma of prosecution, such people are treated as victims and neither prosecuted nor awarded penalties.
	The unpleasant truth is that human trafficking in England is a big problem and a lucrative trade, as others have mentioned. The proposed directive would improve the rights of victims and ensure a co-ordinated approach with our European partners. We should not turn our backs on this opportunity. There has been some good news in that Professor Trevor Beedham, of the Worshipful Society of Apothecaries, has established a diploma to instruct those involved in this whole business on how they should deal with the victims. That is a welcome development.

Baroness Gould of Potternewton: My Lords, I, too, thank my noble friend for initiating this very important debate on the horrific subject of trafficking women and girls. While trafficking is not a new phenomenon, its magnitude, form and impact have become more alarming and devastating. As my noble friend said, trafficking is modern-day slavery.
	The Project Acumen research, to which the noble Lord, Lord Luke, referred, also identified that a minimum of 2,600 victims were sex-trafficked into England and Wales during the 12-month period of the research, but given that trafficking is intrinsically linked to constant movement-women being moved from place to place on a weekly basis-this snapshot cannot give a complete picture. I am sure that the figure is much higher.
	Other noble Lords have talked a lot about prosecutions. I want to talk a little about prevention. The Olympics and Paralympics are the greatest sporting events in the world, but there is ample evidence to show that trafficking of women increases when large sporting events are held. For instance, according to the Greek Ministry of Public Safety, there had been a 95 per cent increase in the number of identified human trafficking victims during the 2004 Athens Olympics. Following those Games, a Russian teenage Olympian was trafficked to the Canary Islands and was only found by the police three years later. At the 2006 FIFA World Cup in Germany, there was not as much trafficking as might have been expected, but despite careful planning by the German authorities there was evidence of criminal networks trafficking across Europe. There was similar evidence from the Winter Olympics in Vancouver, and in South Africa this year there is evidence of trafficked women being transported across the continent in time for those games. This evidence cannot be ignored.
	Britain is a Mecca for the extremely profitable industry of human trafficking and, of course, the coming Olympics are an opportunity for a very lucrative trade. There is also the increased ability to facilitate entry of trafficked women as visitors to the Olympics. What training is being given to staff at points of entry about trafficking during the build-up to the Olympics? I am referring not only to airports and sea ports, but St Pancras station, which is important. There is already evidence in east London in particular of increased applications for massage parlours, saunas and strip clubs. A survey of the London sex industry carried out in 2008 showed that four out of five massage parlours and saunas offered sexual acts on site. Because of this, the organisation of which I was chair, the Women's National Commission-which I am sorry to say has been purged today-set up a working group alongside the Home Office and the Metropolitan Police to help to co-ordinate their work on reducing the level of trafficking of women up to and during the Games and on looking at the services which could be offered as a consequence of prostitution, abuse and sexual assault. This work can no longer be carried on. Do the Government have an overall plan for bringing together and co-ordinating the work that is being carried out by many organisations on the different aspects of this issue during the build-up to the Olympic Games?
	Like the noble and learned Baroness, Lady Butler-Sloss, I congratulate the Metropolitan Police, with which we have been working, on its continuing efforts to try to do something about trafficking across the five boroughs that are particularly involved. There needs to be a holistic, multi-agency approach, and that is the Government's responsibility. I hope that the Minister can answer this in some detail and that he can say whether the Government intend to continue with the UK action plan initiated by the previous Government.
	My final point to the Minister has been raised by every speaker so far. It concerns the Government's refusal to opt in to the directive. I support those who are asking for a meeting. Refusing to opt in to the directive is one of the most serious things that the Government have done. I am trying to be gracious about this. The Government have said that they are committed to human rights. Nothing violates women's human rights more than trafficking for the sex industry, which is what is happening. Every effort should be made to ensure that their human rights are safeguarded. That means opting in to the directive. Doing otherwise raises doubts, and one starts to question the Government's commitment to human rights. I hope that we can have a meeting and thrash it out, and that the Government will change their mind.
	In conclusion, and to revert to the 2012 Games, it would be a tragedy if the UK were added to the list of countries where trafficking was a focus of the Games. I hope that the Minister will be able to tell me that that will not be so.

Lord Roberts of Llandudno: My Lords, I am pleased to join this debate with a brief intervention and to thank the noble Baroness, Lady Massey, for initiating it. We have all spoken with the same intent, including the noble Baroness, Lady Gould, and my noble friend Avebury. I am glad to call my noble friend Lord McColl, "my noble friend"; I could not say that of every Member on these Benches. It is wonderful to say how much I agree with so much of what he said this afternoon.
	The directive is designed to prevent slavery for sexual purposes of people trafficked into the United Kingdom. It includes a common Europe-wide definition of the crime of trafficking, to make it easier to convict offenders across the European Union. Co-ordinated action is vital, especially as many of the offenders are from new member states of the EU. As the EU might expand its borders again, there are predictions that the situation could get even more serious. I just do not know why we would opt out of the directive.
	The directive is a very useful provision, to which the United Kingdom should be party. We cannot veto it, but we can opt out. What is the message to the rest of the world and other members of the EU if we opt out? It is that we are again the Johnnys-come-lately of Europe, as we have been on so many occasions. We missed the boat at the setting-up of the European Economic Community. We dragged our heels, and went in when the agenda had already been drawn up by those who were already members. We dragged our feet on the common agricultural policy. Because we were late going in, the regulations were already there, in favour of the members who were already on the inside.
	On this occasion, at least, let us say that we will be at the heart of a humanitarian vision in Europe, which is where we should be. We should be making the European Union the leading agent of humanitarian causes in the whole world. We can make that contribution.
	In conclusion, our record on the adoption of European directives has been laudable. We have adopted most of them. On this occasion, however, as my noble friend Lord McColl has said, if, as the Government say, what is in the directive is already covered in our laws, what objection can there be to our opting in to the directive? I ask my colleagues and others to give it their wholehearted support.

Lord Bew: My Lords, I, too, thank the noble Baroness, Lady Massey, for securing this important debate. She has performed a great service to the House. I speak somewhat reluctantly. Three years ago, when I first came to the House, the view in Northern Ireland was that there simply was no problem with human trafficking. The Police Service of Northern Ireland said that there were no signs of it in society. The then Minister, Paul Goggins, who had responsibility for the matter and who was very diligent, claimed that there was no clear evidence of human trafficking. When the UK-wide anti-trafficking initiative, Operation Pentameter, was launched in 2007, it was again thought that there was no sign of human trafficking in Northern Ireland.
	One could take some comfort from this from a Northern Irish point of view. One might say that the prevalence in Northern Irish society of stronger forms of religious morality than in the rest of the United Kingdom may have played a role. Less charming is the fact that in Northern Ireland the paramilitaries often control prostitution and therefore it would be difficult for outsiders to break in. For whatever combination of charming and less charming reasons, it appeared that Northern Ireland did not have this problem.
	However, things have changed dramatically and sadly during the course of this year. The assistant chief constable, Drew Harris, has issued a statement saying that the police have now recovered dozens of individuals whom they suspect have been trafficked for the purposes of prostitution or domestic servitude or to work in some form of business. The assistant chief constable's statement continues:
	"After we carry out operations and raid places, neighbours say that they wondered why lots of men were coming and going to and from the premises at all times of the night and day".
	In June of this year, Northern Ireland's Minister for Justice, David Ford, again said that anti-racketeering officials had rescued dozens of victims of trafficking in Northern Ireland. He said that human trafficking is nothing less than modern-day slavery.
	In this respect, the Northern Ireland Assembly's work has been good and strong. In June of this year, the Public Accounts Committee also issued a statement to the effect that it now acknowledged that there was a serious problem; and in September, talks were held with the relevant minister in the Republic of Ireland, Dermot Ahern, Kenny MacAskill, the relevant Scottish Minister, and David Ford, the Minister for Justice in Northern Ireland, in order to co-ordinate policy. After this meeting, Mr Ford admitted that Northern Ireland was a staging post for human traffickers operating between Scotland and the Republic. This followed the arrest of a Scotland-based group, which was alleged to have been involved in forced trafficking and to have had a large budget for advertising sexual services in the local press. The sophistication of the operation was remarkable.
	The Minister who replies at the end of the debate has no responsibility for the matters that I have just raised; they are devolved matters. In this respect, I am happy to say that the Northern Ireland devolved authorities are taking the matter seriously. Other noble Lords have raised the issue of the European directive and our compliance with it. My own view was that the Government had a reasonable case. However, while listening to the speeches this morning, in particular those of the noble Lords, Lord McColl and Lord Roberts, with their emphasis on the significance of the European directive with respect to the cross-border dimensions of the problem, I began to wonder whether the Government's case was as strong or as reasonable as I thought it was yesterday.
	Even more profound than the question of the European directive is that of our values. Precisely because we are at a moment of economic crisis in the United Kingdom, the decisions and tone of government must reflect a sense of what it is to be a civilised society. This is even more important now. Therefore, I ask the Minister, at the end of the debate, to address the seriousness of the moral issue.

Lord Sheikh: My Lords, I thank the noble Baroness, Lady Massey, for securing this debate. Human trafficking is probably the world's third largest illegal trade.
	I have raised the issue of human trafficking on a number of occasions in your Lordships' House, as it is a topic about which I feel strongly. This abhorrent practice is equivalent to modern-day slavery. Victims of trafficking are lured from their native countries with promises of greater opportunities in a foreign land. They are then traded by ruthless gangmasters like commodities. I make no distinction between those who engage in human trafficking and the slave masters of past years.
	Women and children tend to be the main targets of the predatory gangs who engage in this immoral trade. I care about issues relating to women and children. I very recently attended the sixth Asia-Europe Parliamentary Partnership meeting in Brussels as a delegate of the British Parliament. At the meeting, which was attended by parliamentarians of 22 countries, I initiated discussions concerning the protection of females and children. I successfully tabled the following amendment, which was included in the final declaration:
	"We stress the need to give priority to gender equality and empowerment of women. There must be progress on the reduction of maternal mortality and improving maternal and reproductive health. We totally condemn the awful practice of abuse of women and children as a weapon of war to instil fear amongst opposing sides in war-torn areas".
	The Association of Chief Police Officers released a publication in August that implied that 17,000 of the estimated 30,000 women who engage in off-street prostitution were migrants. More startling is the fact that 2,600 of these women are thought to have been victims of trafficking. I am pleased that such victims are given a 45-day reflection period, along with the option of temporary accommodation. However, a number of organisations have indicated that that might be insufficient. What plans do the Government have to ensure that victims of human trafficking are given adequate assistance to rebuild their lives?
	I welcome statutory guidance to support collaboration across government agencies in areas such as finding suitable accommodation for child-trafficking victims. Reports suggest that a growing number of children are being trafficked into Britain to work in domestic cannabis factories. A study by the Association of Chief Police Officers reveals that child exploitation for the purposes of cannabis production has increased in recent years. Last year, the Child Exploitation and Online Protection Centre published a threat assessment of child trafficking, which revealed that Vietnam was the country of origin for a number of children trafficked to work in cannabis factories. I should be grateful if the Minister could inform your Lordships' House of the steps that Her Majesty's Government are taking as part of co-ordinated action with the Vietnamese Government to tackle this worrying trend.
	I welcome the announcement by the Home Secretary of the new National Crime Agency. This new organisation will make it easier for police forces to collaborate on national issues, and it will tackle organised crime while protecting our borders. I also look forward to learning the contents of the imminent national plan on trafficking.
	I support the increased efforts, announced by the Government, to detect and rescue victims of trafficking by allowing border officials to conduct separate interviews at all airports for women and children travelling with an adult who is not a parent, guardian or husband. I am also in favour of efforts by the Royal Navy, as part of the Africa Partnership Station initiative, to strengthen maritime safety and security in the western and central parts of the continent by training the Nigerian naval forces to police their waters effectively.
	I am proud that the United Kingdom has ratified the Council of Europe Convention on Action against Trafficking in Human Beings. We must work closely and successfully with our European partners to combat this evil practice.
	I welcome the United Nations global plan of action against trafficking in persons, as it calls for a common approach to combat this practice that is co-ordinated and consistent across continents. I particularly welcome the creation of a United Nations voluntary trust fund for victims of trafficking, where the task will be to protect the vulnerable while supporting the physical and psychological recovery of victims. I am committed to seeing all forms of human trafficking eradicated. The exploitation of people is horrific and cannot be tolerated in any society.
	I was born and brought up in Africa, a continent that has been ravaged by slavery. It is where great men such as General Gordon and Dr Livingstone lived and died-people who passionately believed in abolishing slavery. I have great admiration for Dr Livingstone, and with my father visited Ujiji, on the shores of Lake Tanganyika, where HM Stanley first met Dr Livingstone.
	As a nation, we have a proud history of defending the rights of those who have been oppressed. We must make every effort to deal with the plight of the many individuals who have the misfortune of falling victim to this shameful practice.

Lord Dubs: My Lords, I congratulate my noble friend Lady Massey on having made this debate possible. I want to say a little about the nature of the problem and what can be done about it and to refer briefly, as others have, to trafficked children.
	It is important to distinguish between people smuggling and people trafficking. The better an understanding we have of the problem, the better we can tackle it. Smuggling is clearly an activity where the person being smuggled wants to be smuggled, whereas trafficking involves force, violence, deception, intimidation and perhaps coercion. Indeed, a person might start their journey to this country being smuggled and then be trafficked on arrival, so it is quite a complicated problem.
	The figures are very hard to come by. We are probably dealing with the tip of an iceberg when we talk about, say, 5,000 people trafficked into this country. Estimates are hard to get. It is clear that the majority of the victims are women and children and it is clear that it is an extremely lucrative activity for those engaged in it. The Convention on Action against Trafficking in Human Beings came into force in April 2009 and it helped by including provisions to identify victims and to bring more cases to court.
	Child trafficking is the most appalling aspect of the whole issue that we are debating. It has already been said that it includes exploitation in terms of domestic servitude, helping with cannabis farms, street crime and pickpocketing. It also includes sexual exploitation, child abuse, benefit fraud, illegal adoption and even forced marriage.
	UNICEF has put out some positive statements. It says clearly that the victims of trafficking should not be punished for illegal entry or stay in the European Union or for forced involvement in illegal activities, but that, as victims, they are entitled to protection, assistance and compensation. That should surely be the basis on which we approach these unfortunate people. As regards children, it is absolutely clear that the needs of the child must come first and that any intervention should be based primarily not on concerns about immigration status but on the needs of the child and what can be done to secure his or her well-being.
	I understand from various figures that about half the people trafficked into western and central Europe come from the Balkans or former Soviet Union countries, although I also understand that a disproportionately large number of children may be coming from Vietnam. I was in Moldova a year or so ago, where I met people from a number of NGOs. They were all concerned about trafficking-either about informing and warning local people of the dangers of trafficking or about helping those who had been returned. Very few people from Moldova are trafficked to the UK but it is clear that, as a country, we need to provide more support for NGOs and other bodies in the source countries to help them in preventive work and in securing the safe return and well-being of those who have been removed from western countries.
	I have seen an estimate that one in seven sex workers has been forced into prostitution through trafficking, although that is a lower figure than was bandied about in the debates in this House a year or two ago. Nevertheless, it is an important issue and one that we should bear in mind.
	Last June, the Home Affairs Select Committee produced a report and I want to refer to some of its recommendations and to other recommendations. The first key point is to increase public awareness, as the issue is known about by too few people and is only occasionally mentioned in the newspapers. Greater public awareness would lead to greater detection.
	As has been said, there is a need to train all public officials who might come into contact with people where there are indications that they have been trafficked-for example, workers in the health service, social workers and even building inspectors and health and safety inspectors. We need to look closely at some industrial sectors where there must be a suspicion that a large number of trafficked people work, such as the construction industry, although that is probably an area less relevant to women. I believe that immigration authorities should issue sanctions against the employers of unregistered workers as a disincentive to exploitation, rather than having the burden fall heavily on those whom we should regard as victims.
	Returning again to children, I have read that one difficulty with children is getting good interpreters. It is no good just getting someone who speaks their language, as sometimes an interpreter might not be on the side of the child. A sensitive approach is required. A social worker should be allocated to each child or young person where there is a suspicion that that child has been trafficked in order to provide support. Bed and breakfast accommodations are not suitable in that situation and one needs to provide far more support.
	We have a responsibility to deal with this matter in this country but, as everyone has said, it is an international problem, which is why we must regret that the Government have not yet gone along with the EU directive. I hope that they will do so and that they will accept that we need to co-operate with other countries in dealing with the problems at source and support those countries that are trying to prevent their own citizens from being trafficked to the West.

Baroness Benjamin: My Lords, I thank the noble Baroness, Lady Massey, for securing this timely and important debate. I feel that the noble Baroness and I are kindred spirits, as we both work to promote the well-being of children. I agree with everything that she said in her introduction, as I do with everything that has been said so far in the debate.
	I suppose that I should declare an interest in this debate, as my ancestors were enslaved people. Millions of Africans were taken from their villages, kidnapped, shackled, sold and transported to distant lands to toil and labour for the financial benefit of others. Many were murdered if they tried to escape. Men, women and children had to be strong to survive the beatings and abuse, stripped of their names, their culture and their dignity. Thankfully, hundreds of activists motivated the population to stand up against slavery and 200 years ago the Abolition of Slavery Act was passed and this horrific trade in African life was halted, bringing to an end a trade that involved most European countries. Yet here we are in the 21st century, taking part in a debate on human trafficking-slavery-which involves not just those very same European countries but almost every continent.
	Slavery still exists; only its face has changed. Its victims are enduring the same indignities and horrors as my ancestors. I know that noble Lords will agree with me when I say that the trade in human beings is a foul and evil practice, which can be stopped only if society and government act. Like those brave activists in the past, we have to do whatever we can to bring an end to this barbaric trade. We must educate the public to be vigilant, to be aware and not to ignore the signs around them: children begging in the streets, Fagin-like characters often managed by sinister adults; houses in suburban streets frequented by numerous men; and sweatshops and backstreet factories. Let us not ignore these blatant signals for fear of getting involved.
	Like many of the problems in our wounded, materialistic world, there is no simple solution. Only an attack from all sides will have any effect. One of the strongest weapons that we have at our disposal is education and some of the strongest educational weapons that we have, which the anti-slavery activists did not have, are film, television and the internet, which can be used for good. Today, these weapons allow us to highlight and to bring to the attention of everyone in the global society in which we live the problem of human trafficking, which takes place all over the world and in some of the most unexpected places. I am proud that the media industry, to which I have devoted the past 40 years of my life, can make a difference-and television the most.
	The television series of the book Roots had a profound effect on me 33 years ago, as it told the story of my ancestors and their journey through enslavement. But in the past 10 years or so, many shocking, hard-hitting films and television programmes have been made, dramatically increasing public awareness of the modern trade in human beings. The most recent was "I Am Slave", which was shown on Channel 4, a true story about a 12 year-old girl, kidnapped from her village in Sudan, who ended up as a domestic slave, right here in London, chained, beaten and abused. I wept when I watched that programme, for that was someone's child, someone's daughter, someone's sister. It is said that over 5,000 more like her are working behind closed doors here in the UK. That is shameful and something has to be done about it.
	Another film that illustrates the horror of human behaviour is "Trafficked", a haunting and chillingly shocking film about the sex trade in Ireland. It gives a graphic insight into what is happening when we are tucked up safely in our secure comfy beds. The beds that those victims lie in are far from safe and cosy.
	More and more people are being inspired by documentaries, films and newspaper articles to become proactive, such as the young musician whom I head about just recently, who saw the documentary "The Journey" and recorded a CD to tell the story of young women sold into sex slavery and continually moved across borders. He did so because he felt compelled to do something to raise awareness. I believe that, in order to engage more people like him, we should encourage the media to search out stories that highlight the evil trade in human beings.
	In centuries past, slavery was out in the open and was more visible, but now it is in the shadows. In many ways, society is unwittingly feeding it by demanding cheap labour, by buying cheap products and by visiting brothels. If the men who use those brothels thought for a moment, they might become aware that the young girl with whom they are having sex-perhaps the same age as their own daughter-is a victim of human traffickers.
	Eradication of human trafficking has to be given the highest priority by all Governments. It has to be tackled on an international scale because it is an international problem. We must remain constantly alert and on guard, because, sadly, evil is a human condition, which only a powerful sense of morality, honesty and spiritual good can overcome. Some may think that slavery has been consigned to the dustbin of history, but how wrong they are. Slavery and human trafficking are alive and kicking; they are still here on our doorsteps and they are gaining strength. So for the sake of my ancestors and my descendants, let us bring an end to human trafficking. Together let us go into battle and fight it with all our hearts, or this wicked, evil trade will continue to be a shameful stain on humanity.

Lord Laming: My Lords, I, too, add my congratulations to the noble Baroness, Lady Massey, on initiating this important debate. The noble Lord, Lord Dubs, is right to draw a distinction between smuggling and trafficking but, sadly for the victim, the end result is often the same. I say that because if I were to ask each one of us to think about where we were on, say, the evening of 28 October 1998, I suspect that we would struggle to think back. Had Victoria Climbié lived-and she certainly should have lived-she would have been able to say that that was probably one of the most significant dates in her life.
	Victoria then lived with her parents and siblings in a small community in the Ivory Coast. She was then eight years old. She was very intelligent and energetic-a very lively child-and her parents worked extremely hard to get her into a local school, where the head teacher judged her to be one of the brightest students whom he had taught. On that October evening, a great aunt visited them. Although from the Ivory Coast, she was in fact a French citizen and she was on her way back to Paris. She pressed Victoria's parents to allow her to take Victoria back to Paris with her so that she could provide her with a better education and greater life opportunities. A combination of Victoria's excitement and the numerous reassurances that the parents were given helped to overcome their understandable hesitation and Victoria left with her aunt the following morning.
	What the parents could not have known was that the aunt had earlier persuaded the French authorities that she had a daughter in the Ivory Coast and that she had arranged there for that mythical daughter to be registered on her passport. Of course, she did not have a daughter; she had instead selected a girl called Anna for that purpose. Alas, at a very late stage, the arrangements to get Anna back to Paris fell through, so in desperation she put great pressure on Victoria's parents. Before the aunt and Victoria boarded the flight back to Paris, Victoria had her head shaved and the aunt acquired a wig in order to pass her off as Anna. Victoria was told that from now on she was not Victoria Climbié but Anna Kouao.
	Once the two had established themselves in Paris, the French authorities began to ask questions about Anna because they were concerned about her welfare. Kouao did not welcome those questions and her response was quickly to move to London. Once in London, she presented herself and Anna as a homeless family. As in France, the presence of a young child meant that the authorities sought to help with accommodation and financial benefits.
	I mention all this because what followed in respect of that child should give us all deep concern about the dangers of what can happen to trafficked children in our country. In the following 10 months, Anna was known to no fewer than four different social services departments, three housing departments and two specialist police child protection teams. Moreover, she was admitted to two different hospitals, because the staff in accident and emergency suspected that she was being deliberately harmed, and she was referred to a specialist children's centre managed by the NSPCC. Yet despite the involvement of all those key agencies and literally hundreds of staff, Anna was never registered at school and never attended school for one day in those 10 months. Worst of all, nobody asked what a day was like for her in her life.
	We need not dwell on the appalling suffering that Anna experienced or her terrible death. Suffice it to say that it was only after she died that the police did some remarkable work and discovered that she was not Anna Kouao but Victoria Climbié and that she was not a French citizen but had parents in the Ivory Coast.
	I mention this only because, as we all recognise, millions of children cross international borders every day and it would be terribly naive of any of us to think that within that number there is not a high proportion of children who are potentially seriously at risk. The challenge for us is to ensure that those children who are at risk are recognised and identified and that steps are taken quickly to protect them.
	What we do not know is how many children come to this country to meet someone at an airport or a port purporting to be their parent who is not their parent, how many young adults are made to look like children or how many young people have been brought to this country having been promised a wonderful future only then to experience the most ugly and destructive aspects of human behaviour. It is impossible to get accurate figures, but precisely because of that we should do everything to work together across national and international boundaries to ensure that we identify and protect children and young people who are subject to some of the most appalling things.
	I hope that the Government will give further thought to opting in to the EU directive.

Lord Hunt of Kings Heath: My Lords, I, too, congratulate my noble friend Lady Massey on her timely and moving speech on human trafficking-or modern slavery, as my noble friend Lady Gould described it. I pay tribute to all the other speakers in our debate, which has raised some very important questions for the Government to answer. The noble Baroness, Lady Benjamin, gave us a very clear wake-up call.
	The scale of the problem has been the subject of some debate both today and among a number of the relevant organisations. I accept the point made by my noble friend Lady Massey about the difficulty of obtaining statistics which can be deemed to be accurate, but there seems to be a consensus that we could be talking about as many as 12 million adults and children in forced labour, bonded labour and forced prostitution. Behind those statistics is a huge scale of human misery.
	In the UK, in 2008-09, the House of Commons Home Affairs Select Committee found real challenges in estimating the numbers and, in the end, settled for more than 5,000 victims, while the EU estimates that between 100,000 and 800,000 people are trafficked into the EU every year. Those statistics are an interesting contrast with the number of prosecutions in both this country and other countries. In 2007-08, there were 87 prosecutions for trafficking. In 2008-09, there were 114 prosecutions. There were 18 convictions in 2007, 38 in 2008 and 35 in 2009. I understand that a further 35 cases are currently progressing through the criminal justice system. That shows some progress, but there is a long way to go. I echo the congratulations given by the noble and learned Baroness, Lady Butler-Sloss, to the Metropolitan Police but, as she suggests, other forces need to learn some of the lessons that the Met has learnt in developing their own programmes.
	The contribution of the noble Lord, Lord Laming, was very apposite when he reminded us of the tragedy of Victoria Climbié. As I recall, the work that he and others did identified overwhelming failures of professional practice and the failure of professionals in different agencies to communicate and share information. I must say that the announcement by the Government of the abolition of ContactPoint is quite extraordinary in that context. I ask the Minister to explain to me why the Government really consider that necessary when the whole point of that initiative is to ensure that information is shared. Surely the lesson of Victoria Climbié is that had information been shared by those agencies, she might well be alive today.
	I am proud of what the previous Government did in relation to this difficult issue. The UK action plan was published in March 2007. The United Kingdom Human Trafficking Centre was established. We signed the Council of Europe's Convention on Action against Trafficking in Human Beings. The focus was widened to tackle issues such as forced labour and child trafficking. Since 2003, there have been specific anti-trafficking laws in force in the UK, including the Sexual Offences Act 2003 and the Asylum and Immigration Act (Treatment of Claimants, etc) 2004. As the noble and learned Baroness, Lady Butler-Sloss, said, the national referral mechanism was set up following implementation of ECPAT in April 2009. The Poppy Project was set up to provide accommodation and support for women who have been trafficked into prostitution and has 54 bed spaces in houses nationally.
	I am proud of what was achieved, but I fully accept that there is much more to do. My noble friend Lord Dubs referred to the Home Affairs Select Committee report and its recommendations for making improvements in the services available and the co-ordination that is necessary. I was very taken by what he said about the need to improve preventive measures through increasing public awareness and the need to train a variety of public officers about the indicators of forced labour so that they can identify it and help victims to find help. There is concern that the identification system is geared towards viewing trafficking as an immigration crime, coupling it with facilitation or people smuggling, which are completely different. Those are interesting matters that need to be considered very carefully.
	In relation to the UK national referral mechanism, there has been concern about the training of the staff involved and the fact that more emphasis is placed on the immigration status of presumed trafficked persons rather than on the alleged crime against them. The noble and learned Baroness, Lady Butler-Sloss, put some very pertinent questions to the Minister, and I hope that he will be able to respond to them. It is worth making the point that this problem was also referred to by the US State Department in its 2010 report which stated that although the UK fully complies with minimum standards, the Government need to take greater steps to ensure victims are not penalised for unlawful acts. My noble friend Lady Massey and the noble Lord, Lord McColl, gave some positive and powerful illustrations of what can go wrong.
	We then come to the Government's policy. Mr Damian Green, the Immigration Minister, said that combating human trafficking is a key priority and that the Government are committed to identifying and protecting victims. I welcome that statement as a broad principle, but there are a number of questions that the Minister needs to answer. I shall raise three: on the directive, support for victims and the resources and effort available for education and prevention, which were raised by my noble friend Lady Gould.
	This country played a pivotal role in the development of the trafficking directive. It contains a number of very important provisions. I still do not understand why the Government have decided to opt out. Theresa May told the House of Commons on 6 September that she saw no benefit to the UK because most of the provisions have already been acted upon in the UK. The Home Office said that the directive will make little difference to the way the UK tackles the problem. Surely that misses the point. Apart from the point put by the noble Lord, Lord McColl-that briefing that we have received suggests that that is not entirely accurate because the directive goes further than our existing -it seems to me to be an incredibly crass decision. We played a key role in getting this directive drafted, and we want other countries to implement the proposed directive, so how can we seriously expect those countries to do so if we are not prepared to ratify it? I do not understand the reason that the Government have given. The logic of the analysis by the noble Lord, Lord McColl, was unanswerable. I am sorry to suspect that hostility to Europe led the Government down that path. I hope the Government will reconsider. Perhaps the Minister has some good news for us today. At the least, I hope that he will take up the invitation by the noble Lord, Lord Avebury, and others to convene a meeting of noble Lords interested in this area.
	I shall make two other points. I think that the Minister will not commit himself on resources before the 20th of this month, but I hope that he will seek to protect the services currently available. I also hope that when it comes to prevention and education he will listen very carefully to the comments of my noble friends Lord Dubs and Lady Gould about the need to strengthen preventive programmes now and in the context, as my noble friend said, of the Olympic Games when, as she said, we might expect to see a major increase in trafficking activity. This is a very important debate, and I hope that the Government will be able to respond constructively.

Lord De Mauley: My Lords, I congratulate the noble Baroness, Lady Massey, on securing this debate on this very important topic. I know that she has a long-standing interest in this area and, in particular, in the welfare of children and young people. The debate has been very interesting. I am grateful to all noble Lords for their helpful contributions on how to improve our efforts against trafficking. This is a matter on which I know there is much cross-party interest, and think I can go so far as to say agreement. The prominence of this topic is reflected in the fact that there are no fewer than three debates in Parliament on this issue this week, as we approach Anti-Slavery Day on Monday, which is intended to raise awareness of trafficking as modern-day slavery. My noble friend Lady Benjamin underlined that point in her passionate and eloquent speech.
	I assure your Lordships that this Government take their responsibilities to combat these frankly disgusting crimes very seriously. The noble Lords, Lord Dubs and Lord Laming, drew our attention to the important distinction between smuggling and trafficking, and they are right. Today we are debating trafficking, although as the noble Lord, Lord Laming said, there is crossover between the two. He also took us harrowingly through Victoria Climbié's experiences, which are still so vivid in our memories, and emphasised the importance of our urgent attention to this subject.
	A major element of concern voiced by noble Lords today has been the decision not to opt in to the EU directive. I would be grateful if noble Lords would allow me to attempt to deal with that as comprehensively as I can later on.
	First, as regards our overall approach, there can be no doubt that human trafficking of children and adults, whether for forced labour, prostitution, domestic servitude or any purpose, are appalling crimes in which people today are treated as commodities and exploited for profit. The Government take a comprehensive approach combining a determination to tackle the criminals behind the trade with a commitment to supporting victims. This approach is designed to provide the framework in which we can ensure the necessary joined-up activities. Through work across government with law enforcement agencies, including the police, the Serious Organised Crime Agency and the UK Border Agency, and in conjunction with the voluntary sector, which plays such an important role in the care of victims, we must, and I believe we will, make substantial further strides towards tackling this menace.
	Several noble Lords, including the noble Lord, Lord Dubs, and my noble friend Lady Benjamin, mentioned the need for public awareness, and their comments are well taken. I should also like to pay tribute to the several wonderful charities working in this area. Noble Lords have mentioned several and there are many more, all of which have highly dedicated people who are doing marvellous work. The Government recognise, and are grateful for, the huge benefits that they bring.
	On enforcement, we already have legislation in place which outlaws trafficking and makes it an offence to pay for sexual services with someone who has been subject to exploitative conduct. This is backed by a robust policing and wider law enforcement response. My noble friend Lord McColl referred to what Sweden is doing and I can assure him that we are watching what is happening there, as in all member states, closely. Improving our knowledge and understanding of the problem is a key component to ensuring that our response is effective.
	As my noble friend Lord Luke said, in August, the Association of Chief Police Officers produced a new study on the nature and scale of trafficking for sexual exploitation in England and Wales. It found that there are approximately 17,000 migrant sex workers in what is termed the "off-street" sector. Of these, at least 2,600 are trafficked and a further 9,600 migrant sex workers are vulnerable, which means that they have elements of vulnerability to trafficking. But most are likely to fall short of the trafficking threshold, which is the term for a combination of indicators, perhaps the most important of which is that the individual is being exploited. These figures and others quoted by noble Lords show why effective enforcement action is so vital.
	Police forces are supported in this work by the United Kingdom Human Trafficking Centre, which plays a key role in providing operational co-ordination and advice to forces, including through its 24-hour tactical advice line. The noble and learned Baroness, Lady Butler-Sloss, expressed concerns about the ability of the border police to stop trafficking at the border, emphasising the need to maintain enforcement activity across the whole country. That is part of the reason why the Government are committed to establishing the National Crime Agency, which will include the border police and is specifically committed to tackling organised crime.
	The noble Lord, Lord Bew, referred to the situation in Northern Ireland. That trafficking is taken seriously there is perhaps demonstrated by the fact that, as I think he said, the Northern Ireland Assembly passed a Private Member's Motion in September condemning the crime. The PSNI is active with other law enforcement agencies to recover victims and to secure convictions. Recently, it co-ordinated a UK-wide operation, which saw 15 potential victims of human trafficking recovered across the UK. It is as keen as anyone to make progress.
	Within London, the Metropolitan Police Service has established the Human Exploitation and Organised Crime Unit within the Specialist Crime Directorate to lead on combating human trafficking gangs in London, particularly-I think that my noble friend Lord Luke and the noble Baroness, Lady Gould, asked about this-in the five Olympic boroughs during the build up to the London 2012 Games. The activities of the Metropolitan Police in those boroughs provide an outstanding example of the very determined work that they are undertaking to ensure that the Games are not plagued by such crime and that those who seek to force women into prostitution will be met with the full force of the law.
	My noble friend Lord Avebury asked, among other things, whether the UKHTC maintains a database of cases that can be referred to by the police and the CPS to help them to decide on the most appropriate charge. From 1 April 2010, all cases of human trafficking have been flagged electronically on the CPS case management system. These data are passed to the UKHTC on a regular basis to inform joint analysis. CPS electronic monitoring enables the capture of those cases where charges were changed following the first hearing or where trafficking cases proceeded on an offence other than trafficking. This will assist in identifying whether victims are dropping out of criminal proceedings or not supporting prosecutions. It will also provide indicators of any gaps in existing legislation that inhibit ability to bring a successful prosecution.
	Care for victims was emphasised by many noble Lords. Ensuring that victims receive the protection they need and deserve is vital to our overall efforts at combating trafficking. As part of the implementation of the Council of Europe Convention, the National Referral Mechanism has been established to improve identification and protection of trafficking victims. Identified victims get an extendable 45-day recovery period and, in certain circumstances, a temporary residence permit. Victims are also entitled to accommodation, advocacy, counselling, medical care, legal advice, interpretative services and reintegration assistance if they return home.
	The noble Baroness, Lady Massey, and the noble Lord, Lord Dubs, raised several issues about the organisation of our efforts to tackle child trafficking and care for the victims. Child trafficking is a form of child abuse and, in front-line policing terms, falls within the remit of police child protection work, in partnership with local authorities and children's services. Responsibility for the care, protection and accommodation of child trafficking victims falls within the responsibilities of local authorities under the Children Acts of 1989 and 2004. Where a child is assessed as trafficked and therefore "in need", a social worker is appointed-I think that the noble Lord, Lord Dubs, asked about this-and will be responsible for putting in place an individualised care plan, covering the full range of the child's needs for accommodation, education and other support.
	The noble and learned Baroness, Lady Butler-Sloss, and others raised concerns about the NRM. We agree that we must continuously look to making improvements. The noble Lord, Lord Hunt, specifically referred to training. A review of the NRM is being conducted. One of the key issues raised as part of that review has been a need to improve awareness of this process among the various authorities, including local authorities. We agree with that. Officials are working on the best ways to achieve this.
	The noble Baroness, Lady Massey, also raised the type of accommodation provided. This will depend on the assessment of risk and the needs of the individual young person, together with the availability of accommodation locally. It might be in a children's home for younger children or with a foster carer employed or engaged by the local authority. I should say that separated and vulnerable children from abroad enjoy exactly the same entitlements as all UK-born and resident children.
	Local children's services work in close co-operation with the police and the UK Border Agency to offer potentially trafficked children the necessary protection. At the border and within the UK, the UK Border Agency works closely with other statutory agencies, including the police and local authorities, to safeguard children. Arriving children and any accompanying adults are routinely interviewed at the port of entry. The UK Border Agency has for some time employed professional social workers who are available to give advice to UKBA staff on child welfare and child protection issues as they arise. As part of the NRM review officials are working to raise awareness of the NRM process which provides a mechanism to co-ordinate information and intelligence about a child's needs.
	Turning to international and European Union co-operation, human trafficking is very often a cross-border crime. So we must ensure that there is sufficient international co-operation between Governments and law enforcement agencies. The Government remain committed to improving that. Several if not most noble Lords have, understandably, raised the fact that the United Kingdom has decided not to opt in yet to the EU directive on trafficking in human beings. Noble Lords have raised a number of specific points on which they have concerns with this decision. Let me now attempt to address some of these and if I do not pick them all up I will write to noble Lords after the debate.
	It is important to underline that although the decision is not to opt in at this stage, we will review the position when the directive is adopted. Furthermore, we continue actively to participate in the negotiations. Several noble Lords raised their understandable concerns regarding the prosecution of those who are trafficked, making the important point that the focus must be on identifying and prosecuting those who are doing the trafficking. We certainly agree with that. However, a blanket ban on prosecuting those who are arrested or apprehended by the police and who later disclose that they have been trafficked would be unlawful under the Prosecution of Offences Act 1985 which sets out the statutory obligations of the CPS. Specific guidance has been given to the CPS which requires prosecutors to review each case with a full analysis of the relevant facts and circumstances in a manner that is retrospective and case-specific, and which makes it clear that it is not in the public interest to bring charges against those who are coerced.
	The matter of funding support for victims between the time they approach an NGO and when they are determined to be a victim was raised by, among others, my noble friend Lord McColl. As I have said, children have exactly the same entitlements as all UK born and resident children. Where potential adult victims who are without accommodation come to our attention, the appropriate authorities will work with NGOs to find interim accommodation until a decision about their status is made. Although the point has not been raised particularly by noble Lords, perhaps it is worth saying that we are compliant with the directive in this regard.
	My noble friend Lord McColl said that the directive goes further than the convention on the requirement to provide "necessary" medical assistance to victims. I have been assured that all victims have access to full NHS care. The noble and learned Baroness, Lady Butler-Sloss, my noble friend Lord McColl and other noble Lords raised the matter of a special representative or legal guardian for child victims in court proceedings. Such victims currently receive the services of an independent reviewer, and it is the view of the Government that the distinction between this and a special representative is a fine one. However, it would be shocking if there were local authorities who could not or did not provide an adequate service of this type. If noble Lords are able to make me aware of specific examples of failures in this area, I shall take them to the department.
	Another issue raised by my noble friend Lord McColl is the requirement in the directive to appoint a rapporteur or equivalent mechanism. The United Kingdom has an Inter-Departmental Ministerial Group on Trafficking which the Government believe fulfils the function of a rapporteur and that scrutiny by this group satisfies the requirements as set out in the directive. In terms of data gathering, the UK Human Trafficking Centre acts as a central repository for intelligence and data on human trafficking.
	Adopting the directive would require some of its measures to be enshrined in legislation. Noble Lords will be aware that the Government have a general rule that they are keen to avoid extra legislation where reasonably possible. We are of the view that what matters is whether we actually tackle this terrible crime properly. We take it very seriously indeed and believe we have the tools we need, but as I said earlier, although the decision is not to opt in at this stage, we will review the position when the directive is adopted. I also take the point made by the noble Lord, Lord Bew, about the moral message.
	The UK has a strong record in the fight against trafficking and is compliant in both legislation and practice with most of what is required by the directive. It contains no operation or co-operation measures from which the UK would benefit. While it will indeed help to improve the way other EU states combat trafficking, it will make little difference to the way the UK does so. There are also risks that some of the concessions secured during the negotiations may be reversed by the European Parliament. By opting out now but reviewing our position when the directive is agreed, we can choose to benefit from being part of a directive that is helpful but avoid being bound by measures that are against our interests. Several noble Lords have asked for a meeting, and I should say that I will be delighted to meet interested Peers, should they wish.
	I can assure my noble friend Lord Roberts of Llandudno and the noble Lord, Lord Hunt, that we are satisfied that our decision will not affect our relationship with other European Governments. The UK continues to play an active role in helping to improve EU-wide efforts to combat human trafficking. We will continue to work constructively with those in Europe on issues of mutual interest. We have, for example, contributed to the Stockholm Programme, which contains a commitment to fight trafficking among the EU's priorities until 2014. We are also involved in a number of initiatives focused specifically on trafficking, for example, in improving data and sharing best practice. The importance of co-operation between our law enforcement agencies such as the Serious Organised Crime Agency and their European counterparts, including Europol and Frontex, will of course continue.
	While I have attempted to highlight what has been achieved by the UK so far, the tasks ahead are certainly not easy. The very nature of this covert crime means that no one can be satisfied that it is totally under control. It is for this reason that we and all those involved in law enforcement and victim support must work relentlessly, and we need to keep under review all aspects of our work in this area. Noble Lords will be interested to know that my honourable friend the Minister for Immigration will shortly be announcing improvements in the ways we tackle these crimes.
	Several noble Lords asked questions which I have not been able to answer adequately in the time allowed, and I hope they will appreciate that I felt it particularly important to attempt to explain the Government's thinking about their decision not yet to opt in to the directive. If I may, I will write to them.

Baroness Massey of Darwen: My Lords, I thank all noble Lords who have taken part in the debate. Diverse issues have been raised very passionately and with utter conviction, based on the experience of noble Lords around the Chamber. I hope that some useful follow-up will ensue from this short debate. It is an international and a domestic issue, and indeed there are questions about training, accommodation, identification, prosecutions and victim support.
	I thank my noble friend Lord Hunt for his forceful and perceptive summary, and I thank the Minister both for discussions before the debate and his response during it. I know that he is concerned about this problem, and I respect his view. However, I have to say that I still cannot accept his explanation for not opting in to the European directive. It is a puzzling statement that will send negative signals around the voluntary sector and the parliamentary world when it is clear that we have done so much in the past to defend and protect the victims of trafficking. Now we seem to be saying that that is not important any more, and I urge the Government to think again. However, I welcome the Minister's confirmation that he will hold a meeting with those noble Lords who are interested in the directive, and I look forward to it. I also look forward to the completion of the NRM review and to future collaboration. Again, I thank noble Lords for their participation.
	Motion withdrawn.

Public Bodies: Reform

Lord Taylor of Holbeach: My Lords, with the leave of the House, I shall now repeat a Statement made today in another place by my right honourable friend the Minister for the Cabinet Office, Mr Francis Maude. The Statement is as follows:
	"Mr Speaker, this Government have taken decisive action to restore accountability and responsibility to public life. For too long this country has tolerated Ministers who duck the difficult decisions they were elected to make. For too long we have had too many unaccountable officials with a licence to meddle in people's lives. For too long we have had quango pay spiralling out of control, so that seven people in the Audit Commission are paid over £150,000 a year at a time when the average civil servant is paid £23,000.
	The landscape for public bodies needs radical reform to increase transparency and accountability, to cut out duplication of activity and to discontinue activities which are simply no longer needed. This morning, my Written Statement outlined the start of a process to curtail the quango state. I have led an intensive review into public bodies, subjecting each to four tests. The first is existential: does the body need to exist or its functions carried out at all? The answer to that question in some cases is no. For example, we decided that government did not need an independent body to deliberate on the purchase of wine. However, if, as in most cases, the body's functions are deemed necessary, then we sought to establish whether these functions should properly be carried out at an arm's length to government. If the body carries out a highly technical activity, or is required to be politically impartial, or needs to act independently to establish facts, then it is right for it to remain outside government. This is the case with bodies such as the OBR and Ofgem. However, any quango which does meet one of these tests will either be brought back into a government department, devolved to local authorities or its functions will be carried out by the private sector.
	We have gone through an extensive process to determine the outcome of this review. Our first task was quite simply to identify how many quangos there are and what they do. It may sound absurd, but it was and it remains incredibly difficult to gain firm information on these bodies. Many do not publish accounts; there is no central list; and there are a myriad of different types, all with different statuses. The official list of NDPBs lists 679 bodies, excluding those in Northern Ireland, but that does not include non-ministerial departments, government-owned public corporations and trading funds. Our review covers 901 bodies and we believe this is the true extent of the landscape. I should stress that departmental agencies are not in scope. These are directly controlled by Ministers who are accountable to Parliament for what they do.
	Once we had established the overall list, each department has gone through a rigorous process to determine whether each of their quangos meets any of these tests. The list I have published today is not complete; it is a work in progress. The House will note that a number of bodies are subject to a longer term review, such as the Children's Commissioner or the Office for Fair Access. However, of the 901 bodies in the review, substantial reforms are proposed for over half. We propose that 192 will cease to be public bodies; 118 will be merged down to 57 bodies, removing wasteful and complicating duplication of effort; and 171 are proposed for substantial reform while retaining their current status.
	For those bodies which we are abolishing, I should stress that in many cases this does not mean the end of the function. Abolishing the regional development agencies does not mean that we no longer care about promoting regional business but that we think it can be promoted in a better way. Since RDAs have been introduced, regional imbalances have got worse. The development agencies carried a staggering £212 million in administration costs. We believe that local businesses and local authorities are best placed to decide what they need, not highly paid executives imposed on them by government. An activity does not need an unaccountable bureaucratic structure in order to signify its importance; the exact converse is true. If something is important, then someone who is elected should make decisions about how it is done. This is why we are bringing a host of functions back into government, such as those of the Child Maintenance and Enforcement Commission and the Renewable Fuels Agency.
	All remaining bodies will be subject to a rigorous triennial review to ensure that the previous pattern of public bodies often outliving the purpose for which they were established will not be repeated. They will be expected to become more open, accountable and efficient. I will give more detail on the new framework to the House in the new year.
	All the changes proposed here will be delivered within departments' spending review settlements. Those bodies whose status is being retained may be subject to further reforms following the spending review, in the same way as all other parts of the public sector.
	I want to acknowledge the dedication and hard work of those who work in public bodies, and we are committed to working with chairs and chief executives of these bodies to ensure that change is conducted as fairly and as smoothly as possible. To enable these proposed changes, we will shortly introduce a public bodies Bill which will give Ministers power to make changes to named statutory bodies. Other forthcoming legislation, such as the education Bill and the localism Bill, will also be used to make changes directly.
	I believe that these reforms are the first and necessary step to restoring proper democratic accountability to public life and signal a complete culture change in government, from one which ducks difficult decisions, is opaque and allows profligacy, inflated salaries and waste, to an administration which is open and transparent about what it does, takes responsibility for its actions and is mindful of every penny of taxpayers' money. I commend them to the House".
	My Lords, that concludes the Statement.

Lord Hunt of Kings Heath: My Lords, I thank the noble Lord for repeating the Statement. We believe it right that the work of non-departmental public bodies should be scrutinised and kept under review. Indeed, that is what the Labour Government were doing. We reduced the number of arm's-length bodies and delivered record efficiency savings, but we did it as part of a considered, orderly approach, avoiding the massive disruption in stability which may result from the Government's approach announced today.
	Why is it being done? We heard from the Minister a number of reasons, but I would take him back to the announcement made round the Queen's Speech 2010, when we were told it was to reduce the cost of bureaucracy and that savings of around £1 billion per year were anticipated. Since then there seems to have been a shift in emphasis; we are now told that the purpose is to increase accountability. Abolishing transparent independent bodies and bringing some of their functions into central government departments is not what I would describe as an increase in accountability. How is accountability increased by bringing these functions into virtually invisible units within large central government departments? How in future will we know what work is being done? How will the people doing it be held to account? I hope the Minister will be able to clarify that.
	One reason for the stress on accountability is that the Government are nowhere near to the savings in expenditure that they thought they were going to get when they announced the policy. Where is the £1 billion per year savings that we were promised? In fact we were told this morning on the "Today" programme-not in Parliament-that saving money is not the principal objective. All the evidence suggests that it will cost more money than it saves in relation to a number of the organisations, among them the Audit Commission, the RDAs, the British Film Council and Standards for England. When you take account of the redundancy, relocation and retraining costs and the contracts which will have to be stopped midway, you can see that that is not surprising. What is the total cost of implementing these plans this year and next?
	We support the drive for efficiency. However, let us look at the Human Fertilisation and Embryology Authority, an internationally respected organisation which performs a very important role at modest cost. If we set that role against the cost of disruption to the organisation and its staff, we realise that transferring its functions to another regulator is surely not worth doing. I also suggest that it shows some disrespect to this House. I would remind the Minister of the debates that we held early in the decade when this House agreed to extend the research purposes to which the Human Fertilisation and Embryology Authority could give approval. One of the key reasons why, after a seven-hour debate, this House agreed to the extension was the respect in which we hold the HFEA, its integrity and its robustness. We throw that reputation away at our peril. What does the Minister have to say to his noble friend Lord Willis, who pointed out in Oral Questions yesterday that,
	"as the noble Baroness, Lady Warnock, said ... the fact [is] that we enshrine in legislation and through regulation the very special status of the embryo. Since 1991, the HFEA has carried out that function very effectively indeed and it has done so because it has the support of the British people".-[Official Report, 13/10/10; col. 512.]?
	There are similar points to be made about other organisations. What will be put in place of the General Teaching Council? There was a general welcome for the establishment of a professional body of regulation for the teaching profession. When its abolition was announced in the other place by Mr Michael Gove, he was unable to answer questions about how a replacement structure would be put in place. It is right that the Minister should tell us today.
	Why do the Government wish to abolish the Health Protection Agency? Its role is to provide an integrated approach to protecting UK public health, including the provision of independent scientific advice to government. The problem is that the Government intend to pull the work of the HPA inside the Department of Health. They will also bring a number of other independent expert advisory bodies within the department. Much though I respect the Department of Health, the fact is that independent scientific advice is sometimes uncomfortable to Ministers. Will the scientific advice now being brought inside the department be made publicly available? Will it be known to Parliament if Ministers disagree with the advice?
	The abolition of the UK Film Council has caused great concern among leading film makers. What will be the cost in terms of lost experts? I also question the uncertainty being caused by the review of CAFCASS when we know that it is under considerable pressure in supporting children. What about Consumer Focus? My experience at the Department of Energy and Climate Change was that it had a valuable role to play in bringing forward concerns among consumers in matters to do with energy. We are told that its role is to be taken over by the citizens advice bureaux, but the CAB does a very different job. Are the current responsibilities, powers, duties and functions of Consumer Focus to be transferred lock, stock and barrel to the citizens advice bureaux?
	The Statement referred to regional development agencies. I know from living in Birmingham, in the West Midlands, that there is great concern about the loss of the RDAs. They have done fantastically valuable work. Local enterprise partnerships will simply not have the budgets, nor will they be up to the task. It is already clear that, in the West Midlands, the Black Country is to be split off from Birmingham, creating two separate local enterprise partnerships. That is a crazy decision which will break up the cohesion that we have seen in the past few years.
	What is the job impact of these decisions on the regions? I hope the Minister will be able to tell me. What has happened to the quangos that were promised in the Conservative Party manifesto? We have heard a lot today about the iniquities of these bodies, and some of their officials, too, but what about the 20 new quangos promised by the Conservative Party? Can the Minister confirm that those quangos will now not go ahead?
	Very little detail is given in the Statement about the proposals. Nothing is said about actual amounts of money, either costs or savings. Nothing is said about the impact on jobs. I suggest to the Minister that, in respect of each public body that is being abolished or changed, the Government should provide a statement showing which activities are going to be carried out in the future, which will be transferred to another body, how many full-time equivalent staff will be saved and how much money will be saved. It is also very important that, before legislation reaches us, there should be an early opportunity for the House to discuss these matters in full. I hope he will encourage the House authorities to allow us to have a full debate on these matters.

Lord Taylor of Holbeach: I thank the noble Lord for his thoughtful comments and questions on these reforms, as well as for his general support for the government strategy, which is, after all, to review non-departmental public bodies. As he rightly pointed out, the Government of whom he was a member were doing that, too.
	I should assure the House that this review is essentially, and has always been, about accountability. I answered a question here not so very long ago about what was going on in the review and I made it clear that the three tests have mattered more than anything else. That is why I am not in a position to give noble Lords detailed answers on the budgetary implications of the changes; that will all become part of the spending review which we anticipate next week.
	The noble Lord had me thumbing through my briefing given the multiplicity of bodies that he mentioned. I shall do my best to answer him. If I fail to do so and drop a catch, I shall write to him and put a copy in the Library.
	On the RDAs, we will just have to agree to disagree, because the Government see it differently. The noble Lord rightly pointed to the RDAs as effective articulators of a regional voice. The local enterprise partnerships are likely to be even more effective in identifying and articulating local needs than the existing RDAs. It is an unassailable point that regional differences in this country have increased during the time in which RDAs have been in existence. It is a matter of opinion, but I am giving your Lordships the Government's opinion, which I support.
	Each of these bodies is staffed and supported by people who are passionate and knowledgeable about the particular work that they do. Such passion is admirable, but it can lead to mission creep. Noble Lords will have noted that in a number of instances. A body or committee is set up to meet a pressing or current need but, once it is in existence, it finds new work for itself. Each of these small changes are in themselves rational and well meaning but, over time, they can result in a huge number of similar bodies, as noble Lords can see from the list today, with many overlapping or even duplicating functions. It is simply good government to keep the tendency for mission creep and duplication in check.
	Moreover we need to ensure that there is direct accountability to elected politicians for tough decisions. The noble Lord said that he could not see how bringing an organisation into the department would increase accountability. I would have thought that this House is very good at making departments accountable by bringing Ministers to the Dispatch Box to account for activities within their departments. In truth, many of these bodies will not have had a single question asked about them during the time of their existence. They are obscure. This will make Parliament the forum in which all government activity can be challenged, and rightly so.
	We need to take stock from time to time and see if the right tasks are being performed by the right people. The need to reduce the spending deficit provides an added emphasis to the task, but that is not necessarily the prime mover for the way in which this particular review has been undertaken.
	I will go through one or two of the points made by the noble Lord. He talked about the Human Fertilisation and Embryology Authority. He might also have mentioned the Human Tissue Authority, which is a similar body facing a similar absorption into a more general health and science-based review body. The creation of the Care Quality Commission has given Parliament the opportunity to achieve that. As my noble friend said yesterday, the HFEA has achieved the regard of the public and Parliament, but that does not mean that we should not review its scope and activity and look for a better way of doing what it does. That is exactly why we have looked at all these bodies and are presenting changes to the House. Change is not something to be feared. It is a challenge, but it does not mean deterioration, as some cynics have suggested. The cost of the changes will be met within departmental limits set out in the spending review.
	The noble Lord asked about the General Teaching Council for England. There is a review of all the teaching bodies that are designed to maintain standards of teaching in the UK. Within the context of that change, it is believed that the General Teaching Council for England will disappear. That is not to say that the function it was performing was of no value. The same applies to Consumer Focus. Consumer Focus will be absorbed into the citizens advice bureaux, which are highly regarded public bodies with which the public relate and can identify. Although Consumer Focus has done good things, it can be replaced by the CAB and can strengthen the CAB without diluting consumer interests. It is right to do that.
	The noble Lord asked for more time and deliberation-for specific conclusions on the detail, where staff will move and how functions will be delivered. We cannot have this both ways. There are proposals setting out clear intentions on accountability to be delivered by departments with staff and stakeholders. The previous Government set out their own programme of changes to 123 arm's-length bodies. At least 50 of those proposed for consultation are within our listings. We are reforming 480 and are committed to making that happen. I hope that the noble Lord is reassured by the Government's determination to focus on this issue both for the sake of accountability and for the sake of efficiency and good government.

Lord Fowler: My Lords, I support the general policy put forward by my noble friend, but I want to ask about broadcasting policy, which is dealt with in this paper. What duties are being removed from Ofcom as proposed in the paper? In particular, why has the opportunity not been taken to abolish the unnecessary BBC Trust, which has few friends inside or outside the BBC, and certainly qualifies for inclusion? Why are we not bringing private investment into BBC Worldwide, which must be to the benefit of that company and was even supported by the previous Government?

Lord Taylor of Holbeach: The noble Lord makes some useful suggestions for the ongoing process of the review and I am grateful to him for them. They are not covered within the existing programme of change, but the Government intend to continue to test all government bodies against their standards. I note my noble friend's comments and I am sure that I can take them back.

Lord Borrie: In light of the well-publicised speech during the summer by the right honourable Vince Cable on the disastrous situation that would come about if capitalism were to be completely unrestrained, is not the proposal to abolish the Competition Commission astonishing? It is true that the Statement says that it will be merged with the Office of Fair Trading, but over the past 50 years in which the present system for advancing competition has been in force, with the Office of Fair Trading, the Competition Commission formerly the Monopolies Commission and the Government, it has generally been accepted that the system is fair, just and effective. I mention fairness because the word is so important today. The Office of Fair Trading and the Competition Commission are separate and not merged together because the more aggressive body, the Office of Fair Trading, makes prosecutorial propositions against a merger of two companies, for example, and the Competition Commission can then judicially and impartially judge between them.
	The Statement emphasises the matter of political impartiality. The reason for the whole set-up dealing with competition policy, to which all parties have adhered for 50 years, is that there should be political impartiality when it comes to individual decision-making about company mergers or the restrictive practices of a particular company. They should not be subject to party-political pressure. Surely, the Minister would agree.

Lord Taylor of Holbeach: I understand the noble Lord's experience in these matters and respect it greatly. There is a view, which the Government hold, that there is duplication between these two bodies, which has led to unnecessary duplication of effort. The merger of the two bodies will make them more efficient. There will be ongoing consultation on the way in which this merger will take place and how the new body will be structured in order to make it effective. I am grateful for the noble Lord's comments. They will be taken on board.

Lord Lester of Herne Hill: My Lords, is the Minister aware that there will be widespread support for what is contained in the Statement about retaining the Equality and Human Rights Commission but radically reforming it? Is he aware, too, that the independence guarantees, which I personally persuaded the previous Government to write into the Equality Act 2006, were not meant to produce a situation of irresponsibility? Will he ensure that Ministers and civil servants bring home to the chairman and commissioners that they will no longer receive grants in aid unless they can demonstrate value for money in advance of the grants and not only by some kind of ex post facto review?

Lord Taylor of Holbeach: I thank my noble friend for his comments. Widespread concern has been expressed in the press about the Equality and Human Rights Commission and its role. We are proposing to retain it, precisely because we believe that a regulator is needed to help to enforce the laws governing equality and anti-discrimination. But we believe that the EHRC's remit is too wide and that it has not always been well managed. That is why we are proposing substantially to reform it.

Baroness Hayter of Kentish Town: I declare an interest as the chair of the Legal Services Consumer Panel. We had no advance notice of this; there was an e-mail at 9.36 this morning to one of my staff-not to me-alerting us, not in the published list but in the question and answers that Ministers were given as their brief, that the Government were minded to merge the panel in with Citizens Advice. Is that the normal courtesy that you would have for an organisation that you wish to merge?
	On the issue itself, the Legal Services Consumer Panel was set up with the complete support of this House as part of the Legal Services Act. It is, of course, funded by lawyers-and I thank the many lawyers here for the funding. It is accountable to the users of legal services and is wholly different from Citizens Advice. It advises the regulator on behalf of the users of legal services on how best to regulate, which is an utterly different role from that of Citizens Advice. Was there any logical thinking in putting this measure not in the published list but in the attachment, then not telling us, as well as the unusual history with Citizens Advice?

Lord Taylor of Holbeach: I think I can explain. As the noble Baroness said, the Government are minded but have not made a decision. There is no doubt that she will have plenty of opportunity to consult the Government and the body will be able to discuss the matter with the Government. So there is no specific proposal, but the Government are minded to merge.

Lord Harries of Pentregarth: My Lords, in his response to the noble Lord, Lord Hunt, the Minister mentioned the HFEA and the Human Tissue Authority in the same sentence, implying that they were comparable. Will he kindly bear in mind that, a few years ago, an attempt was made to bring together these two bodies, and they were actually found to be incompatible? It cost a lot of money to bring them together and then to rend them apart again. We are all sympathetic in this House to trying to cut costs. However, I wrote to the Minister pointing out that, with regard to the HFEA, there are other, quicker ways in which to save money, rather than going through the whole expensive business of setting up, dismembering and then trying to integrate with new bodies.

Lord Taylor of Holbeach: I thank the noble and right reverend Lord for putting the decision in context. Indeed, the two bodies are entirely separate, but the proposal is to treat them in the same way, by merging them into a third body within the existing healthcare bodies. That is why I referred to them together.

Lord Crickhowell: My Lords, one has only to look at the list of bodies to see that the review was badly needed, and I welcome the fact. However, I pick on two bodies answerable to Defra-Natural England and the Environment Agency. It is quite a long time since I handed over responsibility for the National Rivers Authority, which became absorbed into the Environment Agency, but I cannot help being struck by the strength of the criticism contained in the commentary here. It says:
	"Reform through structural, process and cultural change to become a more efficient and customer focused organisation; and clarify accountabilities".
	It is of great urgency that we should have early on a detailed statement of what those criticisms are and what is proposed to do about them. I cannot think of anything much more damaging for an important organisation than to have this kind of description hanging over it without clarification of what is supposed to have gone wrong. In view of the fact that the body has been answerable to Defra since it came into being, and that Defra supervised how it was set up, one wonders why it has got into a state that deserves such criticism and whether Defra is in fact the best body to sort out the mess that apparently exists.

Lord Taylor of Holbeach: My noble friend need have no concerns on this matter, because Defra is well aware of the difficulties of these two bodies. They have suffered from mission creep, and within their budgets there will be a redefining of their role, which is very important. There will be plenty of opportunity because the Secretary of State will, indeed, be making announcements on these bodies in due course.

Lord Boateng: My Lords, the Caribbean Board is to be abolished, which will be of considerable-

Baroness Gould of Potternewton: I apologise to my noble friend, but I am the chair of two organisations that have been purged today, so I feel I must express my views. One of the organisations will become an advisory stakeholder group, and we might well be able to work with that. We have had lots of discussion on how that is going to happen. The other organisation, which is the only national body in this country and the whole of the UK responsible for gender, is being abolished with absolutely nothing to say that it will be replaced. It will be abolished full stop, and its work will go into the department. I want to know how the 620 organisations that belonged to the Women's National Commission will have a voice direct to the Government, and how they will have a voice when they disagree with government. The commission has very often acted as a caveat, being able to co-ordinate the voice of women to government. I have not yet received any answers on that point.
	The whole process has been absolutely diabolical. I have not received a single piece of paper until today, when I had an e-mail message from the Secretary of State that told me that we were no longer going to exist. I have had a couple of conversations with the director of the Government Equalities Office, but not one of our commissioners has. There has been no transparency in the process whatever. We have not been told at all why the three points-although it says four in the document-that we were asked to put to the Cabinet Office have not been responded to. They were put through the GEO, but we have had no response as to why it was decided that we did not qualify on any one of those three points. The whole process has been rushed and, quite honestly, if it could be done, might be subject to a judicial review. There has been no stakeholder involvement in the decisions that this Government have taken.

Lord Taylor of Holbeach: I am sorry to have to disagree with the noble Baroness. Some of these decisions have had to be made by government, and we take full responsibility for making them. Consultations were done with each department, and each department was responsible for ascertaining from all these bodies their capacity to meet the tests that have been set. Discussions have thus been taking place within departments and I am quite surprised to hear from the noble Baroness that she has not been aware of the discussions going on in this field, because I know that she is very much involved in these things. Concerning the women's commission, we are really keen to move away from the idea of having a single body to voice women's issues. Women should actually be engaged in all public bodies and articulating their views across Government.

Lord Boateng: My Lords, the Caribbean Board-

Lord Brooke of Sutton Mandeville: At a similar point in a prior Administration, I was ministerially responsible for a department with 43 non-departmental public bodies. I received a Cabinet Office instruction almost to double the proportion of women on those boards within a matter of months. That order could have been carried out to the letter either by greatly raising the number of women board members or by conducting a massacre of male innocents on their own quarter-decks. At some risk to my own quarter-deck, I minuted back about which course I was to follow. Can my noble friend give an assurance that a competent mathematician will proof-read any similar instructions before they are sent out this time?

Lord Taylor of Holbeach: I cannot guarantee the standards of proof-reading or mathematical skills, but I am sure that we have a highly skilled Civil Service and that no instruction will go out which is neither numerate nor literate.

Lord Boateng: My Lords, the Caribbean Board is to be-

Baroness Verma: My Lords, perhaps the Cross Benches can come in and then the noble Lord.

Baroness Prashar: I stepped down as chairman of the Judicial Appointments Commission after my five-year term at the end of September. Thankfully, that commission is to be retained. However, the body was set up five years ago to enhance the independence of the judiciary and to make the process for selecting judges more open and transparent. We are of course accountable to Parliament through making an annual report to the Lord Chancellor.
	The process for determining the review was less than transparent and the communication could have been better. Of course, there are second-order things in terms of efficiency which can be dealt with through a constructive dialogue between the chair, the chief executive and the commissioners, but the uncertainty still hangs about the type of reform. That kind of uncertainty, which causes a distraction from your core function, leads to waste. I suggest that it would be helpful to get some indication that there is some efficiency in how the actual reviews are conducted, that a distinction can be made between the types of quangos that are being put under review and the ones that are being retained and that those decisions will be communicated quickly to those concerned.

Lord Taylor of Holbeach: The noble Baroness makes valuable points and I take them on board. There is an ongoing review and dialogue concerning the Judicial Appointments Commission, because it is very important that this body achieves the high objectives which the noble Baroness has laid down for it. The Lord Chancellor is in regular contact with the Lord Chief Justice. The review's aims will be to ensure a balance between the executive, the judiciary and independent responsibilities and, indeed, to ensure transparency and openness. I hope that reassures the noble Baroness.

Lord Boateng: My Lords, the Caribbean Board is to be abolished. That will be of real concern to the peoples of the Caribbeans and to all their friends, on all sides of the House and in the country. How is the profile of small island dependencies to be represented across Government, involving DfID, the FCO and the other government departments together with the wider diaspora community? These island dependencies, which have been neglected in the past, see themselves as neglected and will now see themselves relegated to the same league as the Government's advisory board on wines-although even that function is not to be abolished.

Lord Taylor of Holbeach: I am sorry, my Lords, but the truth of the matter is that the Government have taken the view that the Caribbean islands which are dependencies will have access to the Foreign and Commonwealth Office and to DfID and, indeed, that they do not need the Caribbean Board to speak on their behalf. That is a judgment that the Government have made on this issue.

Lord Kennedy of Southwark: My Lords, can the Minister please explain further the process that each department has gone through to make these decisions? His Statement was exceptionally light in that respect. In abolishing the Appointments Commission, will he underline the process that will be in place to ensure fairness in future appointments?

Lord Taylor of Holbeach: The Appointments Commission is not abolished, but perhaps I may explain that the process has been one of a dialogue between the Cabinet Office, the Minister for the Cabinet Office and the Secretaries of State of each department. As I said in the Statement, identifying non-governmental public bodies has not been easy. There is no central list, so each department was asked to identify the public bodies within its remit, then to apply the three tests which I explained to the House in repeating the Statement and the fourth test of the justification for its continued role and purpose.

Apprenticeships
	 — 
	Debate

Moved By Baroness Wall of New Barnet
	To call attention to the case for maintaining and increasing apprenticeships in both the public and private sectors; and to move for papers.

Baroness Wall of New Barnet: My Lords, I am delighted to have the opportunity to open this important debate on apprenticeships. What, at heart, is an apprenticeship for? It is meant to take an individual to an entirely new level of skills and competence through a coherent programme of study and practice. It should provide a company with a skilled employee who has demonstrably developed their abilities. Indeed, businesses such as BAE Systems and Airbus tell me that apprenticeships are critical to meeting their future skill needs. An apprenticeship should give an individual a broad base of useful skills, specific competencies in a technical area and the wider attributes that we call employability. That makes a firm foundation for a career and for progression, if they wish.
	I shall focus on the engineering apprenticeship scheme. The scheme is very popular, yet employers still face practical barriers when considering whether to start or increase their participation. Most of these barriers are more commonly cited by small firms, but some are cited by larger companies. What the barriers have in common is that they can in some way be addressed by the Government, funding, employers and sector bodies all working together. I shall address how we can help employers to overcome these current barriers before concluding with some thoughts on the future of apprenticeships. I declare an interest, as I work with Semta, the sector skills council for science, engineering and manufacturing technologies, which is closely involved with the employers in this scheme.
	The first barrier is cost. Employers of engineering apprentices will tell you that it costs them a lot to recruit and train their apprentices. An advanced engineering apprenticeship costs the employer a great deal in terms of salary and supervision, even when the actual training costs are covered by public funding. BAE Systems estimates that it costs it £73,000 to train an apprentice on top of government funding. That is a big commitment even for a large organisation, but small firms can find it a particularly difficult barrier to surmount.
	The price of an apprenticeship is a reflection of its rigour and content. We can, of course, always look at how to deliver the content at lower cost, using new technology such as e-learning, where appropriate, and maximising economies of scale. Engineering apprentices are paid very well compared to apprentices in other sectors and, indeed, in other countries. That pay reflects their value to the employer and the demands of the framework; it is not and should not be easily changed.
	A second barrier for employers is time. The advanced engineering framework usually takes 42 months to complete-a significant time commitment to ask of a company. Some feel that they cannot see that far into the future when planning their training. Semta has done a lot of work on fast-tracking for apprentices, particularly those who are already in the workforce and have achieved a certain level of skill. For adults on an apprenticeship programme, certain elements can be shortened by accrediting prior knowledge. However, all the businesses that I have talked to say that it is imperative that the outcomes are the same, no matter the age of the individual on the programme. Thankfully, we have moved away from the time-served approach to apprenticeship, where people were believed to have completed an apprenticeship simply by working with an expert for a given period of time. Instead, apprentices must now demonstrate their competence against national standards, which has led to a far more rigorous and effective programme.
	The third barrier relates to the company's ability to deal with the paperwork and reporting involved. Apprenticeship frameworks that attract public funding must of course be accountable for, and transparent about, that income. It can be confusing for companies to deal with the necessary paperwork, particularly if they have not offered apprenticeships before. The running of an apprenticeship scheme also requires a great deal of management, not just of the paperwork to get the funding but also of the programme itself. Airbus tells me that ensuring that the apprentice is receiving the right training at the right time, achieving all the necessary milestones and taking on the right roles as they become more competent needs someone checking on their progress and addressing any issues.
	This is an area where the engineering sector has led the way in its approach. Many years ago, group training associations were set up by groups of small firms getting together to run apprenticeships and other training schemes. The GTA handles the funding contract and manages the schemes itself. It provides member companies with an invaluable service. The local GTA can manage the recruitment of the apprentice, which is vital for small firms seeking a person who is good and a good fit for their business and for the investment that they are making. The GTA can also work with the local college to ensure that all the off-the-job elements of the framework meet the employer's needs and that the apprentice is fulfilling their true potential on the programme.
	Another approach has seen large companies helping their supply chain companies by training for stock. Whenever funding has permitted, this has been embraced. This has meant the large firm taking on extra apprentices, who then find places in smaller companies in their supply chains. Large companies welcome this opportunity, as it enables them to boost the skills of their partner companies, while the apprentices have the opportunity to experience the breadth of activity that a large firm undertakes.
	A barrier that has certainly impacted on some companies in the past is the quality of applicants that they have received for apprenticeship places. While large companies are usually able to fill their vacancies with excellent people, smaller firms have sometimes struggled to find the right person to become an apprentice. This has been linked to poor careers advice given to young people, who have been led to believe that low academic achievement and poor attitude are no barrier to entering an apprenticeship programme. For engineering this is simply not the case and companies can waste a lot of time removing unsuitable candidates from the recruitment process.
	In recent years, thankfully, that barrier has reduced in impact, as more young people seriously consider alternatives to the costs and career progression for full-time academic study post-16 and post-18. Businesses such as BAE Systems have seen many high-quality applicants apply-so much so that the company is now supporting typically 10 per cent of its apprentices on completion to take university degrees.
	With cost, time, the need to run the framework to a certain standard and the quality of applicants identified as barriers, is the answer to make apprenticeships shorter and cheaper, to make them less accountable to national standards and to reduce entry requirements? I fear that that seems to be the situation that some are facing at the moment.
	Pressure on funding has resulted in Semta facing risks to the content of its framework. It has been told that key elements of the framework-namely, the initial training done by all apprentices through a national vocational qualification called performing engineering operations-cannot now form part of the framework. Removing this essential introduction to safe working in engineering environments and to basic engineering skills would damage the engineering apprenticeship immeasurably. Employers are simply not in a position to fund this element themselves for every apprentice whom they recruit. The argument is that this NVQ, which is taken in addition to the NVQ in the specific engineering discipline of the apprentice, is somehow surplus to requirements. This shows a lack of understanding of the true nature and purpose of apprenticeships, as well as a failure to appreciate how the current structure is designed to be a coherent basis for progression and a sustainable career. It also demonstrates that there are currently pressures on sector skills councils to somehow compromise on the content of their frameworks, which they have developed with employers.
	Up to this point, I have highlighted some areas where practical barriers can be reduced without compromising the quality. I will now move on to the philosophical barrier that is at the heart of ensuring that apprenticeships remain the right programmes for individuals and companies. We must not see apprenticeships as a panacea for all skills problems in the workplace. It is important that employers understand what an apprenticeship will deliver for them and that they do not enter into a scheme without knowing the full implications. Advice to employers needs to be clear and needs to explain that, if what they are offering is not an apprenticeship, they should understand that that is not what they are doing and that, rather, they require something else.
	Semta works hard to make the engineering apprenticeship framework fit for purpose, but that purpose is not to provide cheap labour for companies or to string together an incoherent set of units and call it an apprenticeship. In some ways, the size and rigour of the engineering apprenticeship could be called a barrier to its expansion, but the quality of the framework is one of its great selling points to both the individual and companies. I accept that to compromise this might bring in some short-term increases in participation, but it would soon result in a lower standard that did not give the business the full range of skills that it requires or give the individual the mobility within the company or outside it. Additionally, it would cheat the future economy of the United Kingdom of a skilled person who could contribute fully.
	Apprenticeships have predominantly been used for young people who are usually new entrants to a sector and an occupation. However, it has been found that, when the funding for adult apprenticeships was available, there was a huge appetite among people over 25 and their employers to use the apprenticeship programme to boost the skills of the existing workforce. This is because the framework can be used to raise the skills of those already in the workforce who need to boost their competence and who can benefit from a comprehensive programme of development.
	What is an apprenticeship not suitable for? It is not, as I have said, for companies wishing to recruit cheap labour for jobs that do not require a minimum level of skills. It is also not for adults who need only a few elements of the programme to enable them to reskill or upskill. For these people, we must make sure that the qualifications and curriculum framework provide opportunities for funding and accessing bite-sized learning, tailored to the prior knowledge of the individual so that they are not repeating what they already know. This is not an apprenticeship, though; it is still valuable, but it is different.
	Maintaining the apprenticeship brand by ensuring the quality is the single most important thing we can do to safeguard the programme for the future. Doing so will ensure that we can get the right people on to an increasing number of these schemes. Only then can we be confident that great apprentices will continue to contribute to the wealth of the country, that companies will have the right people to grow their business in the future and that young people and older people will be able to contribute to the community and to the businesses that they work with. I beg to move.

Lord Sugar: My Lords, I thank my noble friend Lady Wall for bringing this debate to the House; it is on a topic in which I have a great interest. At the tail-end of 2008 I was invited by the Government to head an advertising campaign to promote apprenticeships. Before agreeing to do so, I decided to research the message that needed to be projected. I concluded that the campaign needed to be directed at employers as well as prospective apprentices. It was clear to me that there was a lack of understanding as to what was on offer to both the employer and the employee.
	In the early part of 2009 the campaign went to air and created a lot of interest. Hits to the apprenticeship website rose from 52,000 to 120,000 per week. There were also 4,000 firm inquires. It is important to note that back in 1997 there were just 60,000 apprenticeships but by May 2009 there were 250,000. Encouragingly, there was a completion rate of 70 per cent. This is an undisputed statistic, and the rise came about under the previous Government. I have heard that the pre-election promise of the current Government-pledging 400,000 apprenticeships over the next two years-has been somewhat watered down. We have to avoid by all means undoing all the hard work of the past. Any proposed government cuts should not be directed at this sector. Indeed, cutting funding for training would repeat the mistakes made during the last recession.
	In 2009 I held four seminars on apprenticeships, where I spoke to audiences of employers in London, Birmingham, Leeds and Newcastle. At these meetings the frequent comment from employers was that they would employ more apprentices if the Government gave them some financial incentive. While I could not agree with them at those meetings at the time, I now have to admit that I agree with them. Now, the money provided by the Government to pay for the training of apprentices goes to fund colleges and so-called learning providers. While I believe that these establishments are needed to a certain extent, to cater for such things as day release, I question full-time training courses in manufacturing or any other physical skill trade.
	I am confident that what I am about to say will be not be disputed by any of your Lordships. No matter what professions your Lordships embarked on, and what academic qualifications you attained, I am sure you will agree that you gained virtually all your knowledge and experience by working in your chosen occupation. Therein lies the key to where any government funding must go. We must encourage employers to train people. To do that, they have to employ them. In any industry that requires skills, be it manufacturing, building or software development, there is a need to grow your own labour force to make sure that the staff are instilled with your firm's culture and, more to the point, loyalty.
	However, I say now what others might be frightened of admitting; while it is important to train staff to grow a future workforce, the reality is that every person you train requires an experienced member of staff to mentor them. From my own companies, experience has shown that to do it properly the mentor has to devote a lot of time to the individual before he or she can be let loose, so to speak. The fact is that while members of staff are mentoring, they cannot do their own jobs fully. Therefore, training the newcomer does not just cost the salary that you are paying, albeit at the minimum wage. More importantly, there is the cost of the loss of the time of experienced staff. So your Lordships might see why employers are saying, "Okay, we will take on and train young people, but we want you-the Government-to pay us or compensate us in some way". In this day and age, when most businesses have to tighten their belts to fight their way out of recession, they can ill afford to have their staff deflected.
	Trust me when I say that, from my experience of taking on young people from college or other so-called training facilities, when they enter my company they really know nothing. In my experience they learn while they earn. I conclude that young people will get far more satisfaction and motivation from working in a firm than from sitting in a classroom, theorising. The Government need to think hard about how they can divert money from training facilities to employers. After all, some of these training facilities are not government-owned; they simply send the Government a bill for every apprentice who passes through their hands. There are people in the Government who are clever enough to work out ways either to create tax breaks or to award grants to companies, small and large, instead of what I consider to be blowing the money on these so-called further education facilities.
	Let us look at what is happening instead. Right now the Government and the taxpayer are playing out something of a charade by providing a place for young people to hide for a while. The Government are giving money to training providers to avoid the embarrassment of having people out on the street. In reality, all they are doing is delaying the inevitable because the end product in many cases is still unemployable and unskilled. The young people will have greater dignity if they are taken into a firm and given a real goal to aim for but do not expect the firms to do it for nothing. While they may get the benefit of a trained employee eventually, anyone who says that an apprenticeship means cheap labour is totally deluded.
	I see that I am not out of time, so I will throw in a last curve ball on a completely different subject. One final thing that the Government might do to promote apprenticeships is to ensure, by way of contractual agreement, that firms that are awarded government contracts must employ a proportion of apprentices.

Baroness Sharp of Guildford: My Lords, I, too, thank the noble Baroness, Lady Wall, for initiating this important debate. I declare an interest as a member of the corporation of Guildford College and as a member of the Skills Commission, an all-party group composed of Members of Parliament and lay members.
	As the noble Lord, Lord Sugar, has indicated, many of us learn as much by doing as by listening. Apprenticeships remain probably the most effective way of passing on complex practical skills. In this country we have a long tradition of craft skills. It goes back to the Middle Ages and the concepts of guilds, master craftsmen, journeymen and apprentices. In those days the apprentice was treated very much as the son of the master craftsman. He was mentored, as the noble Lord, Lord Sugar, indicated, and taken within the family of the learning group. Sadly, that tradition was lost in this country during the Industrial Revolution. It was retained in some craft skills. This House is probably a tribute to the craft skills of the mid-Victorian era. In the mass production industries, the sheer brutality of the Industrial Revolution led to the loss of the master-child relationship that one saw in the concept of apprentices. Interestingly, in Germany and many north European countries, which were industrialised later, it was retained. The tradition of training apprentices, as we all know, remained in those countries and is one that we now look to as an example of what we might follow.
	Even within mass production, of course, the craft skills-the more skilled members of the industry-were trained through apprenticeships right through to the 1950s and 1960s. Many of our leading industrialists entered industry through this route and moved first into middle management and subsequently into top management through the apprenticeship route. However, this route collapsed with the collapse of manufacturing industry in this country in the 1970s and the 1980s. Its nadir was reached in the 1990s. As the noble Lord, Lord Sugar, mentioned, in 1997, only 60,000 young people entered apprenticeships.
	We need to pay tribute to the previous Government for what they did. It began with the report from Sir John Cassels in 1995 and the introduction of the modern apprenticeship, and moved forward very positively under the new Labour Government of 1997. The modern apprenticeship was originally aimed at a level 3 qualification, which is equivalent to A-level, but I rather regret that the concept of the modern apprenticeship was watered down. In 2001 it became a level 2 qualification, equivalent to GCSE, and the level 3 apprenticeship was renamed the advanced apprenticeship. In 2001, approximately 150,000 young people entered apprenticeships. Today, the figure is almost 250,000 young people-an increase of roughly 100,000 over that period-and more are coming through, although the increase is not very large. Interestingly enough, 100,000 young people aged 16 to 18 are now entering apprenticeships-85,000 in the 19-to-24 age group and 56,000 in the 25-plus age group. Over the past few years, since the beginning of the recession in 2007, numbers in that 16-to-18 group have remained very much the same, but we have seen-partly because government money has been available-a very substantial increase in the number of those over 19, and particularly in the over-25s, in the past few years, which I very much welcome. I know that employers are keen to foster this. However, we are, of course, still a long way off the 400,000 target set out in the Leitch report. As I say, in many senses the recession has set back the whole process.
	I am pleased that this Government share the previous Government's view of the importance of apprenticeships and, indeed, the importance of their being employer-based. One of the first acts of this Government was to shift £150 million from Train to Gain into adult apprenticeships, which indicates how important they regard the whole area as being. My honourable friend John Hayes, the Minister for Skills, said:
	"The most important objective of all is to make Apprenticeships the primary, though I must stress not the only, means for people to gain skills in the workplace ... the Government is committed to increasing the supply of Apprenticeships, and improving the quality of the training offered, to make them better suited to the needs of employers and learners alike".
	I wish to raise three issues about the development of apprenticeships. My first issue has been referred to by the noble Baroness, Lady Wall, and the noble Lord, Lord Sugar, and concerns the supply of apprenticeships and the degree to which employers are willing to take on apprentices, particularly those in the 16-to-18 age group. The CBI and the British Chambers of Commerce complain about skills shortages, and indeed about the immigration cap on skilled people, but their own record in training across industry as a whole leaves something to be desired.
	There are, of course, outstanding examples of good training provision such as that provided by Rolls-Royce and BAE Systems. It is interesting to note that there are 15,000 applicants for the approximately 80 places on offer at BAE Systems. It is more difficult to get an apprentice place at BAE Systems than it is to get into Oxford or Cambridge. As the noble Lord, Lord Sugar, and the noble Baroness, Lady Wall, mentioned, the bureaucracy puts off a lot of small and medium-sized businesses. The previous Government and this Government are exploring the development of group training associations to help with that problem. I echo the words of the noble Lord, Lord Sugar, when I say that, as well as companies offering apprenticeships, let us also see the growth of apprenticeships in the public sector. This initiative was begun by the previous Government and I hope that this Government will carry it forward.
	My second issue concerns careers guidance. As I say, I have been a member of the Skills Commission for some time. A couple of years back, it produced a report on apprenticeships. We were horrified to discover from the Edge survey that a typical teacher had very little concept of what apprenticeships were about. To a great extent, teachers in secondary education go from school into college and back into teaching in schools and have no experience of the outside world. The Apprenticeships, Skills, Children and Learning Act 2009 contains a section that was debated at length in this House and required that all young people should get a broad careers education and that they should be told specifically about apprenticeships. I gather that the directive that would implement this section is being held up. I ask the Minister why this is so and whether it will be implemented. It is extremely important that it is as so many teachers do not understand what apprenticeships are about.
	The other important issue I wish to raise is that of progression into higher education. The numbers moving into higher education are pitifully small-something like 2 to 4 per cent of apprentices go into higher education. It is vital that this is seen as an equivalent route. It is a level 3 qualification. It is the same as A-level and it really must be seen as an equivalent route. It is very important that apprenticeships are given equal status. They are an extremely useful way for young people to learn the skills that we need. This Government support them and I am delighted that that is so. I hope that we shall see them moving from strength to strength.

Lord Bhattacharyya: My Lords, I congratulate my noble friend Lady Wall on securing this important debate. It was also a pleasure to hear from my noble friend Lord Sugar. I do not claim to be a celebrity apprentice, but as a former graduate apprentice I am delighted that your Lordships' House is discussing apprenticeships. I have regularly raised this issue in many debates here. I wish that apprenticeships received a tenth of the attention devoted to graduate funding. Tony Blair once said that political interest in vocational education was so low that he could declare war on Iran during a speech on skills and nobody would notice. I am sure that the noble Baroness, Lady Wilcox, will resist the urge to test that theory today.
	It is clear that this Government, like the previous one, see the expansion of apprenticeships as central to economic success-the issue is how. The previous Government did some very good things. In the mid-1990s there was not a penny in the budget for apprenticeships, while today there is more than £1 billion a year. Our policies were right and our intentions were honourable. When Ministers raid the Train to Gain budget, they should pause to be thankful that there is now a budget to raid. But we on this side of the House should not pretend that all was well in the handling of skills. It is hard to study the current system without feeling frustration and confusion. The charge made by the Higher Education Minister, Mr Willetts, of bureaucracy in the funding of apprenticeships has some force. There are too many bodies, too many processes, too much complexity and too little employer involvement. Bodies such as the Learning and Skills Council were too bureaucratic.
	Despite the efforts of all parties, we still have a huge issue with the skills base in this country. We need to solve this problem. We cannot allow a lack of skills to be a hindrance to growth. The ERA Foundation recently asked leading industrialists how to regenerate British manufacturing. One of the top four issues they identified was the shortage of technicians, ahead of even corporation tax. Our Economic Affairs Committee made a similar point in its 2007 report.
	When I was a graduate apprentice, businesses invested in technical colleges, and one of the conditions at that time of becoming a member of my institution, the Institution of Mechanical Engineers, was the completion of a graduate apprenticeship. However, as competition grew, there was less incentive for companies to invest. In response, the Conservative Government in effect nationalised British vocational education by creating the NCVQ. The fundamental shape of the system has not changed much since, although the bureaucracy has been recast repeatedly.
	It is well past the time to move beyond shuffling the bureaucratic pack. First, better technical education at the secondary school level is vital to improving our skills base. We must devote more resources to it. The noble Lord, Lord Baker of Dorking, supported by the noble Lord, Lord Adonis, is battling to create a new generation of university technical colleges. We at Warwick have seen his enthusiasm at first hand, and I sincerely hope that there will be funding to make them a reality in my area.
	The next challenge is to create more high-quality apprenticeships. This week, I attended the Rolls-Royce annual science awards, where the Skills Minister told me that he was passionate about apprenticeships. I wish him the best of luck with the CSR. Together, we saw the great enthusiasm of young people for building their technical skills. Companies such as Rolls-Royce, Dyson, Jaguar Land Rover and others are exemplars, because science and technical education is essential to their future. These companies act as ambassadors in schools for studying science and for apprenticeships. Unfortunately, too few companies follow their lead. To change this, we must go back to first principles. Why do people wish to enter apprenticeships? For a learner, it is the judgment that serving an apprenticeship will increase their career prospects. This cannot be just ticking a box and getting around unemployment. For an employer, it is an investment in the future of their workforce.
	Young people are clear about which apprenticeships are valuable. The Financial Times reported in August that more than 24,000 people had applied for 220 apprenticeships at BT. When apprentices choose to learn at companies such as BT, Rolls-Royce civil aerospace, JCB and Jaguar Land Rover, they understand that future opportunities make it worth sacrificing current income. For employers, an apprenticeship is worth while if the skills that are learnt make the apprentice a more valuable employee. The key to achieving both these objectives is to hand the power of choice to the individual apprentice, so resources flow to the most successful apprenticeships programme. This is the model in Germany. The student chooses the apprenticeship that will provide the best future for them. When they secure their contract, their employer receives a "virtual voucher" that can be spent at whatever technical college the company chooses, while the cost of the apprenticeship itself is the responsibility of the employer. How might we create such a shift in a Britain with limited funding? It is simple; put funding in the hands of the learner and the whole system begins to work in the interest of the apprentice.
	A recent monograph by Alison Wolf for the Institute of Economic Affairs makes this point powerfully. As in higher education, we could offer a system of apprenticeship loans to fund technical education, which would be paid back once the worker was earning at a decent level. In this model, each apprentice would make a contribution to their future success. This would create a significant budget, to be spent on high-quality technical education, which real businesses and apprentices value. We would also cut out huge swathes of bureaucracy. An apprenticeship loan would fund the apprentice's technical education, with the state supporting the student's aspirations via subsidised interest and deferred repayment. The company would assume the burden of apprentice wages and firm specific training, as it should. This would allow government to be the guardian of apprentices' right to a quality technical education and not to be the dictator of national skills needs. Employers would have an incentive to design apprenticeships that are attractive to the best future employees, which would drive up standards and numbers. Of course, we also need to fund vocational education directly, but that scarce money is best spent on funding general technical education, not backing specific courses.
	Apprenticeships are vital to the success of our economy. I know this from working with the automotive industry, where I have found that growth is hampered by a lack of apprenticeships. We have had 10 years of learning and skills councils and before that the techs. Why are we still bothered about skills? If we back the instincts of apprentices, we will create a stronger technical education for all. That is absolutely essential if we are to rebuild our economy on a sure and stable footing.

Lord Haskel: My Lords, this is an important debate because apprenticeships touch so many of our current problems, economic and social, including the need to grow the economy, raising our level of technical skills-as my noble friend Lord Bhattacharyya, explained-and the need to provide people to fill the 2 million jobs that the private sector will have to create. Many of those jobs will need to be in manufacturing. It should be remembered that each manufacturing job supports several service jobs, not the other way around.
	Immigration happens not because of lax borders, but because we are short of the skills that immigrants bring. One reason why we have so many immigrant workers, particularly from European states, is that those countries have well developed apprenticeship programmes for doing jobs for which in Britain there is no formal training requirement. Many of those jobs are in the construction industry, such as ground work or foundation building. One of our largest areas of unemployment and social deprivation is among young people. Apprenticeships help to get these people to work. My noble friend Lord Sugar and other businessmen have voiced their concerns at the low level of skills and education that prospective employees bring to the workplace. Apprenticeship schemes do something about this.
	My noble friend Lady Wall told us that the days of just learning at the bench and serving time are long passed. Yes, apprentices have to learn the technical skills, but they also have to understand them. To get their qualifications, apprentices also have to acquire the modern soft skills of numeracy, literacy, personal communication and presentation. All this has helped to make apprenticeship a much broader, more satisfying, and more worthwhile experience.
	Who provides this? As my noble friend Lady Wall explained, large companies do a lot of this work for themselves and their suppliers. Some industries have group training associations and there are some excellent private-sector training contractors. But there is one group of unsung heroes in this modernisation of apprenticeships which is often ignored-the colleges of further education. I live in Richmond and, when preparing for this debate, I visited Richmond upon Thames College, our local college of further education, and spoke to Rob Rudd who, my noble friend Lord Sugar will be pleased to know, mentors some 130 apprentices. They spend up to l6 hours a week at work and the rest at college. The state pays because they are under 18; but over-18 year-olds who have not done well at school, have become disengaged at school, or who are not academic and prefer practical work, or older people who require reskilling, can find their second chance at a place such as Richmond on Thames College.
	The college finds local companies with vacancies, in addition to the National Apprenticeship Service. There are no big firms in Richmond, and so the college caters for hundreds of small and medium-sized enterprises in the area. This is especially difficult because many of these small companies are either reluctant to offer apprenticeships or had not really thought about it. The college therefore employs somebody to go around all of these firms to create apprenticeship places-a kind of employment agency.
	Furthermore, the college subsidises some of these apprenticeships. With an apprentice of 19 or older, the employer is meant to contribute 50 per cent. Some firms do not pay, either because they cannot afford it or because they are just unwilling to do so. The college carries the extra cost. Private training companies work mainly with the service sector, for which many young people are just not suited. The colleges tend to do the more costly things, like technology, construction, engineering, IT and catering.
	Perhaps noble Lords can see why FE colleges are the unsung heroes of apprenticeships. I know that the Minister is aware of their work, and so I hope that she will agree with me. Her honourable friend the Minister of State for Further Education, Mr John Hayes, in his speech of 29 September said,
	"We are also taking an overdue look at ... the costs of Apprenticeships".
	In the same speech, Mr Hayes also said that the Government have begun to provide an extra 50,000 apprenticeships by redeploying £150 million. Can the Minister say where the extra 50,000 places will be provided and from where the £150 million is being redeployed? How will it affect FE colleges?
	One way in which the Government can help these colleges is to take into account prior learning delivered by the college. Many colleges have young apprentice schemes or pre-apprentice schemes which provide a year at college to help apprentices attain the standards they need in maths, English and IT-the soft skills. The proposal is that they will then be tested again when they qualify. It would be sensible to maintain the exemption that already exists. I see from its website that the Minister's department has extended the consultation on this. I hope that the Minister will agree that there is no need to add more regulation to the already rather complex situation.
	We all seem to agree that knowledge and skills are the key to future prosperity and a more equal society. The noble Baroness, Lady Sharp, and my noble friend Lord Bhattacharyya spoke about how, when Labour was in power, they persistently pushed up apprentice participation rates. Can the Minister assure us that this Government will continue the good work?

Lord Aberdare: My Lords, I am delighted to have the opportunity to speak in this debate, and I declare an interest as a director of two small social enterprises, both of which are engaged in helping unemployed people in London to find and keep employment. Having said that, very few of these jobs have so far taken the form of apprenticeships-certainly fewer than I might originally have anticipated. I also apologise for covering a certain amount of ground where points have already been made very much more elegantly by noble Lords speaking earlier in the debate.
	I strongly support the Government's commitment to apprenticeships, which are filling a vital need to provide jobs and training for young people seeking to enter the labour market, and essential skills for the UK economy. I recently attended the launch of the Southwark apprenticeships challenge "100 in 100" campaign, which aims to create 100 apprenticeship opportunities in that borough within 100 days. I was struck by the range of different apprenticeship frameworks now available. There are no less than 190 separate frameworks in 80 different industry sectors. I was struck, too, by the enthusiasm and commitment of those existing apprentices, and their employers, who spoke at the event.
	However, it is clear that apprenticeships are currently providing only a small part of the answer to the challenges of youth unemployment. If their impact is to be maintained and increased, their attractiveness to young people-and even more to the employers, without whom there would be no apprenticeship opportunities-needs to be enhanced. There are a number of jobs or sectors which may have good opportunities for young people, but which are not currently well suited to apprenticeships. Apprenticeships work very well for jobs which call for specific skills or qualifications, not just in traditional areas like construction, plumbing and hairdressing, but also in business services such as IT, accounting, design, or marketing and communications. However, they are less appropriate in sectors like hospitality, where the key requirements for staff are sometimes more to do with attitudes and behaviours than specific skills, and where a high degree of flexibility is required in working patterns, which may not fit easily with the need for apprentices to spend one day a week in training. There are several successful apprenticeship schemes for chefs, but fewer for roles such as hotel receptionists, waiters or back-office staff.
	Apprenticeships are also scarce in the creative and media sector, where a good many jobs tend to be freelance or self-employed, and may not lend themselves easily to the apprenticeship model. For example, an apprentice has to be employed by someone, which is not always straightforward in a sector where most people are self-employed. Many production companies, magazine publishers and other businesses in the sector are quite small, and SMEs find it harder than larger enterprises to set up apprenticeships: finding out what is involved, identifying suitable frameworks and learning institutions or training partners to deliver them, and accessing available funding. Well targeted information and signposting are needed to make it as easy as possible for different types of employers-small or large, public or private-to implement apprenticeships.
	It is therefore important to ensure that apprenticeships-and, indeed, other employment programmes such as the planned new Work Programme-are sufficiently appealing to employers. Many of the employers we have worked with are keen to take on young people and set them on the first step of their careers. At the same time, however, they are all too conscious of the business pressures they currently face which make it hard for them to find or spare resources to train young people, to pay their wages and to provide the support some of them need to stay in, and do well at, their jobs-support such as the mentoring support mentioned by the noble Lord, Lord Sugar.
	Again, this is especially true of SMEs. One of the great merits of the previous Government's Future Jobs Fund, regrettably terminated by the coalition, was that it provided a real incentive for employers to offer-indeed, to create-jobs for young people by actually paying their wage costs, at least at minimum wage levels, for the first six months of employment. Apprenticeships do allow employers to pay less than the standard minimum wage, but this may not be entirely a good thing. We have even heard of young people dropping out of apprenticeships for the simple reason that they cannot afford the bus fare to work. It does not help many public sector employers who are bound by collective bargaining agreements to pay higher rates.
	Earlier this year, the National Apprenticeship Service offered grants of £2,500 to employers, especially SMEs, to take on 16 and 17 year-old apprentices. This was instrumental in persuading a group of museums to set up a programme for 50 apprentices, which they said they might not have done without the subsidy.
	Pump-priming incentives like this may be needed to encourage employers to go the extra mile in creating jobs for young people in these difficult times, and to overcome their initial doubts about the benefits of taking on untrained young people, with all the perceived constraints and paperwork of a government-sponsored scheme.
	I have focused on a couple of ways to increase the impact of apprenticeships: extending their scope to cover additional sectors and jobs, and enhancing their attractiveness to employers. There are many others, such as: developing higher-level apprenticeships to provide an access route into higher education; supporting colleges in the provision of pre-apprenticeship training; extending the scheme to cover well regarded training programmes not currently recognised as apprenticeships, such as those run by several guilds or livery companies; or finding ways to enable public sector bodies to take on apprentices at a time when many of them are subject to hiring freezes.
	I wondered about the possibility of offering apprenticeships in your Lordships' House, as was done in another place under the aegis of my noble friend Lord Martin of Springburn. I understand that there are programmes for commis chefs and library staff to receive training to gain higher qualifications, although these are not formally classed as apprenticeships. Beyond that, the House, like so many other employers, currently lacks suitable roles or resources for an apprenticeship scheme.
	Apprenticeships can play an important part in ensuring that young people have opportunities to work and to acquire skills, even in a period of economic constraint, so that we avoid the catastrophe of a generation of young people missing out on the experience of work when they leave education. I urge the Government to ensure that apprenticeships, along with other youth employment and skills programmes, continue to receive the support, emphasis and resources required to achieve that goal.

Lord Layard: My Lords, I strongly congratulate my noble friend on initiating this debate. Apprenticeships are vital to the future of the country. As we know, low skill is our problem. It is why we have so many people on low pay, and why we have low productivity and so much youth unemployment. The only way we can eliminate this is through apprenticeships. Learning while working is what young people and employers want. It must be established clearly as the main alternative to A-levels and university for our young people. Youngsters of 13 or 14 must grow up thinking that this is the natural alternative to A-levels or university as a way into a decent job.
	That is why, last year, we enacted the historic apprenticeship Act in this House. The main clause gave, in three years' time, an entitlement to an apprenticeship to every young person with the minimum qualifications of five GCSEs at any grade. If that is implemented, it will be one of the most important things done in the last Parliament. However, will it be done? For me, that is the key question of the debate. I very much hope that the Minister will tell us whether the Government will implement the entitlement to an apprenticeship in 2013, which is in the Act. Obviously, it is not easy to do, especially in a recession at a time of financial squeeze. I shall say a bit about what needs to happen for it to be done, and then I shall make a few more points about why it is so crucial that it is done.
	There are five key steps. First, as my noble friend Lord Sugar said, we must ensure that the employers are much more central to the process, and that they know that they can have the money. This point was made in the report of the Economic Affairs Committee, chaired by the noble Lord, Lord Wakeham. The answer from the authorities is always that the employers can have the money-but do they know this? I think that most of them have no idea that they could have the money if they wanted to run an apprenticeship scheme. Nobody has gone out and offered them the money up front. How many Ministers have made speeches saying, "Take this money"? Has the National Apprenticeship Service gone round saying, "Take this money"? I do not think so; I have seen no evidence of it; but that is what has got to happen. Of course, employers will not take the money if the system is as bureaucratic as it is at present. Linked to that, there has to be a cut in bureaucracy to make it easier for an employer to run an apprenticeship.
	The second issue is the level 2 apprenticeship. Of course we want everybody to get to level 3, but most 16 to 18 year-olds will have to go through level 2 to reach level 3. When the Economic Affairs Committee went to Germany and talked to employers, it was interesting to learn what level of entry qualification they expect for an apprenticeship. They do not expect apprentices to be wonderful. The noble Lord, Lord Sugar, rightly said that they know nothing when they come. They have got to be taken in, in a spirit of good will, by an employer who will make the most of them. That means that employers must be willing to take in young people at 16 and 17 who do not have anything remotely like level 2 already under their belt. This is essential: we will not revitalise the youth labour market in this country, which has closed down over the past 25 years, unless we have employers who accept that their role includes taking in greenhorns.
	Thirdly, in the government allocation of funding, the absolute priority must go to 16 to 18 year-olds. The Government love to say how many people over 18 get apprenticeships. It is always a bigger number than the number of those under 18. It should be the other way around, otherwise there is no chance of achieving the entitlement.
	Fourthly, as the noble Baroness, Lady Sharp, said, schools must be required to inform their youngsters about apprenticeships. I simply do not understand what has happened about that clause in the Act and why it is not being implemented. Perhaps we will be told.
	Fifthly, somebody must co-ordinate this. Who is responsible for making the entitlement happen? It can only be one body: the National Apprenticeship Service. Has it been told that it must make this happen? Has it been asked to produce an action plan for making it happen? Again, perhaps we will be told.
	We are talking about a really important social and economic change, and perhaps I may end with a few interesting facts to show why it is so important. First, apprenticeship is a first-class investment. I should like to quote some estimates of the social rate of return-that is, the rate of return to the whole of society-from apprenticeship based on some excellent work by a former colleague of mine, Steven McIntosh, who is now at the University of Sheffield. He shows-it is a robust estimate, much tested-that the rate of return from apprenticeship has been over 35 per cent per annum. That is incredibly high. Comparable estimates which many of us have done for rates of return from A-level and university are in the ballpark of 10 per cent and are probably even less for full-time vocational education.
	Unfortunately, until recently the Government and people of all parties have tended to think that the solution to our problems is more full-time vocational education. It is not; it is apprenticeship, yet at the moment full-time education is treated more generously than apprenticeship. Full-time education for 16 to 18 year-olds receives £4,000 a year, compared with £3,300 for apprenticeship, although, as I said, the latter yields a rate of return of one-third. Of course, the reason is that full-time vocational education-this applies equally to the diploma and the NVQ-does not provide a ticket for the trade.
	A misconceived thrust was given but fortunately we are now getting back on track with apprenticeship as a centrepiece. However, it is easy to see what will happen in the recession. Young people will stay on in full-time education for lack of anything else to do and we will pay out the £4,000 for them because there are no places for apprenticeships, which they would much rather have. We have to make sure that that does not happen, because either they will not stay in full-time education and become unemployed or they will go into a less useful form of education. Unemployment would be a social tragedy and more full-time education could well be a waste of money compared with apprenticeship.
	Equally, I point out-this has already been mentioned-that apprenticeship is the secret of success in many of our competitor nations. My colleague Hilary Steedman showed that to be the case recently in a wonderful report on apprenticeship in different countries.
	We are discussing something which is not peripheral but central to the future of our country in both the short and long run. In the short run, we face a real national danger of mass youth unemployment, losing a whole generation. Many of these youngsters will reject full-time education and, if we cannot secure them an apprenticeship, we will have a real problem on our hands. In the long term, we will never get a more productive or more equal society without a proper, flourishing system of apprenticeship, which has to start as soon as a young person has nothing better to do. Therefore, it is a dreadful error to build up apprenticeships for those over the age of 18 and not to give priority to 16 to 18 year-olds. Our young people have to see, when they are 13 or 14, that apprenticeship is as available to them as full-time education. I hope that the Minister can assure us that that is what the Government intend to do by implementing entitlement at the due date.

Lord Taylor of Warwick: My Lords, I also thank the noble Baroness, Lady Wall, for securing this debate. It is both important and timely.
	It was an American commentator who said, "Cheer Up. The worst is yet to come!". We know that the economy has very difficult challenges ahead but fundamental to economic recovery will be the issue of skills and training. In my view, apprenticeships are the ideal vehicles for correcting our skills deficit.
	I see apprenticeship training as leading from the top-it is mentoring-so that others can achieve their potential. Some years ago when I worked for a company, a common phrase was applied if things went wrong. It was, "Assistant heads must roll!". That ethos is not the way to encourage and nurture talent.
	A man who ran a small business once said, "When I started my business, I had nothing. Fifteen years later, I still have some of it left". With increased bureaucracy and red tape over the past few years, it has been very difficult for small businessmen to afford to take on trainee apprentices, yet small business is the cornerstone of our economy, and high-quality training opportunities such as apprenticeships are vital to supporting its growth and success.
	I congratulate the noble Lord, Lord Sugar, on raising the profile of the apprentice through his BBC television series. I watched the programme last night and noted that he said he did not want "steady Eddies" or "cautious Carols". I understand by that that he is looking for young people with initiative who are prepared to take risks and to listen and learn while they earn. I congratulate him on raising the profile.
	However, there are other ways of building that profile. I feel that there is a perception problem when it comes to apprentices. Over the past few years, there has perhaps been a perception that an academic degree from a university is somehow superior to practical vocational skills. That is not the case and we have to address that perception problem. Just about every noble Lord who has spoken so far has come up with very practical ideas about what we should do to improve the apprenticeships environment.
	I want to tackle the problem of perception. In my submission the Government should consider a national, annual apprenticeship day in every local authority to celebrate-I emphasise that word-what apprenticeships have achieved and what they contribute to this country. What about issuing a special stamp which could celebrate some of the world's most famous apprentices, such as Isambard Kingdom Brunel, Henry Ford, Vincent van Gogh, Sir Alex Ferguson, the manager of Manchester United, and the late designer Alexander McQueen? That would certainly increase the profile of apprentices and give them a sense of pride in their achievements.
	Edge, the apprenticeship organisation, says that two-thirds of teachers regard their knowledge of apprenticeships as poor and that only one in four teachers recommends apprenticeships in preference to higher education. I believe that the Department of Education should encourage all secondary schools to provide their students with presentations from training providers, employers and apprentices themselves.
	It is important to make the point that only two per cent of apprenticeships go to girls. We need to encourage more girls to look at engineering, science, technology and mathematics. Perhaps Karren Brady, a colleague of the noble Lord, Lord Sugar, could help to promote the message that more girls should look at becoming apprentices.
	The ceremony associated with obtaining a degree should be expanded to apprenticeships. It could be localised and made appropriate to different parts of the country. That would give apprentices a sense of civic pride in their area, and school pupils would see that and aspire to join their ranks. I would go even further. I would like to see a royal society of apprenticeships, rather like the Law Society or the British Medical Association, with a social and professional network similar to that provided by universities.
	Apprenticeships also need to become part of the growth industries such as IT, the green economy and high-tech engineering. The sports and recreation industries are large wealth creators for this country, so they should be part of the expansion of apprenticeships. My father was a professional cricketer and semi-professional footballer. He played cricket for Warwickshire. His apprenticeship involved little more than helping to lay out the kit and polish the boots of the first team squad which he eventually got selected for. Nowadays many professional sports, especially soccer, encourage some training in business and other skills, but it is still patchy and needs improving. There are still too many who fail to make the grade as professional sportsmen and have no other skill training to fall back on, so please do not neglect the sports and recreation industry.
	I do not see higher education and further education as competitors. The university sector can play an important role in assisting the elevation of the image of practical learning. For some years I had the privilege of being chancellor of Bournemouth University, which places a high emphasis on education and meeting the practical needs of employers. We used to say that you will not be able to study the history of punk rock at Bournemouth University.
	We need to develop different levels of training, and that should start with the re-engagement of those outside the workforce and might involve bite-size, modular chunks of learning. Of course that could lead to a more focused level 2, full apprenticeships at level 3 and advanced apprenticeships at levels 4 and 5. Quality control could be monitored through a simpler form of Ofsted-like report. The point was made earlier by other noble Lords that if we ignore the unemployed and do not give them a chance, we shall be creating a bigger problem for the future.
	I fully agree with the noble Baroness, Lady Wall, that apprenticeships should not be seen as cheap labour. There is ample research to show that apprenticeships bring value to employers as well as providing expertise to the apprentices. They are not a problem; they are part of the solution to growing the economy again. The future has arrived. We must recognise it and embrace this opportunity.

Baroness Drake: My Lords, the case for increasing apprenticeships is compelling. The seminal report by the noble Lord, Lord Leitch, in 2006 confirmed that the UK's skill base remained weak by international standards, holding back growth, productivity and social justice. It stated clearly that, if the UK was not to slip down the league table and if businesses were to compete globally, a radical step change was necessary. It stated that skills were no longer a driver of success but the key driver of success. The noble Lord's report set a series of tough ambitions for 2012, including half a million apprenticeships. The 2010 Ambition 2020 report by the Commission for Employment and Skills measures progress against those ambitions. It confirms that, without collaborative intervention by the Government, the UK labour market will face a shortfall of more than 3 million skilled people by 2020 and that, although the UK remains a significant economic force internationally, our productivity rate is outside the upper quartile of OECD countries and needs to increase by 13 per cent-that is some way when one reflects that a 1 per cent increase in productivity generates about £11 billion in additional GDP.
	Recent OECD figures show that, in terms of skills, the UK is improving absolutely but not relatively. At the higher skills level, we hold our position, but in basic and intermediate skills, although we have clearly improved in absolute terms, our ranking has fallen slightly from 21st to 23rd. Yes, significant progress has been made, but other countries have made progress, too-some at a higher rate. We have to push ahead-no pause, no hesitation. Public spending decisions need to recognise that.
	Apprenticeships are one of the skills success stories of the past decade. By 1997, apprenticeship starts had collapsed to 76,000. Compare that to the recent figures emerging of the strong growth in 2009-10, with about 280,000 starts and with successful completion rates at an all-time high of more than 72 per cent. However, it is not sufficient to arrest the decline; the UK must jump on the trajectory to world class. In an environment of public sector reductions, the Government are looking to the private sector to deliver employment growth, but that is unlikely to happen without a sustained commitment to delivering skills transformation.
	About 80 per cent of employers offering apprenticeships report that they provided higher productivity, that they made them more competitive and that investment is normally recouped within two to three years. The CES estimates that, for the economy, apprenticeships return on average between £16 and £17 for every £1 of state investment and a 90 per cent employment rate.
	I want to highlight three concerns. First, it is important to get the correct mix of apprenticeships as well as the correct volume. It would be wrong to maintain the latter at the expense of the former. Expenditure decisions should recognise the real need for higher-level apprenticeships. To do otherwise would provide a poorer match to industry needs and fail to recognise the impact of technology, automation and the knowledge economy. However, sectors have varying needs and the Government must secure an increase in higher-level apprenticeships while maintaining sufficient volumes of foundation apprenticeships, particularly in the service sectors. Inefficient trade-offs for political purposes between apprenticeship volumes and mix would ensure the delivery of suboptimal outcomes for productivity and competitiveness and should be resisted.
	Secondly, decisions must be well informed and targeted by both company size and sector. We are all well aware of the skills challenges in science, technology, engineering and maths. Small and medium-sized enterprises do a lot of apprenticeship training. It is a myth that they do little. They account for the majority of places: 80 per cent of apprenticeships are provided by companies with fewer than 100 employees, with the majority in firms with fewer than 25 employees. The early data emerging on places in 2009-10 suggest that an additional 30,000 employers provided 40,000 extra places last year, with the vast majority being SMEs. There are still many more small companies to target.
	Companies with more than 500 employees offer 5 per cent of apprenticeship places overall, so larger companies need to be encouraged to increase places, even to overtrain, and feed their supply chain. A major challenge to growth in apprenticeships will be the availability of employer places in key sectors. As so many other noble Lords have said, to drive up business demand apprenticeship frameworks must reflect up-to-date skill needs. Funding methodologies, delivery rules and audit regimes should balance guaranteeing quality and value for the public purse with the need for simplicity, which is often so important to so many employers.
	Thirdly, it is essential to anticipate how the major skills challenges will evolve over the next five years. For example, there are cliff edges in those industries where the workforce is ageing and where apprenticeship starts are insufficient. As other noble Lords have said, engineering technicians and construction trades are just two. As has also been said, it is important to tackle this from both the demand and supply sides, to utilise labour market intelligence to inform young people where future skills demands are likely to be and to target firms where future skills challenges will be.
	As many noble Lords have said, skills are a key driver of fairness. Lack of skills contributes to inequality, but acquisition of skills acts as a solution. Qualifications are correlated with stronger employment and higher wages. Young people have experienced the largest percentage increase in unemployment rates, which is why it is so important to see a clear expenditure commitment from the Government on increasing apprenticeships. The necessary drive to increase the number of young people entering university should not lead to the relative neglect of vocational education. Both the academic and the vocational are essential. The advantages of different learning programmes should be made clear to young people. An apprenticeship at level 2 provides a wage premium of 20 per cent for males and 4 per cent for females compared with lower-level qualifications. At level 3, the premium is 22 per cent for males and 14 per cent for females relative to level 2 qualifications. Employment rates for apprentices on completion are around 90 per cent, which is significantly higher even than degrees.
	Finally, I shall refer to a point raised by the noble Lord, Lord Taylor. There is also a need to address continuing occupational segregation-the concentration of men in certain occupations and women in others. WhenI was an EOC commissioner, I chaired an investigation into occupational segregation, which showed that the greatest skill shortages were correlated with male concentrations. Such segregation was found to pervade the apprenticeship system. Unless the causes, such as cultural pressures, stereotyping and inadequate careers guidance, continue to be addressed, labour market inefficiencies will remain and young people will be denied access to opportunities.
	I thank my noble friend Lady Wall for securing this debate, which is critical to the interests of the UK, employers and young people. The case for increasing apprenticeships is compelling. To hesitate will be to fail to grasp the prize of taking the UK up the rankings and making us world class in skills.

Lord Wakeham: My Lords, I congratulate the noble Baroness on introducing this important debate. I confess that my main purpose in taking part was to listen to what I thought would be some useful and interesting contributions and, in particular, to hear how my noble friend the Minister and the Government intend to deal with some of these issues. Do not let us kid ourselves: this is a very old problem. I once said in this House that it is a problem going back more than 100 years. I remember that Lord Dearing, whom we miss dearly, immediately corrected me, saying, "No, it's at least 130 years". Then, in evidence to a Select Committee, he referred to 150 years.
	In this country, we have a very reasonable standard of higher education. I declare an interest as chancellor of Brunel University. As far as I am concerned, I gave honorary degrees to the two noble Lords in this Chamber who have made the best speeches. I can also see others to whom I have given honorary degrees over my time as chancellor. However, I had great pleasure in giving the noble Lords, Lord Sugar and Lord Layard, honorary degrees. There may be one or two noble Lords to whom I have not yet given such degrees, so if they can give me their names I will see what I can do.
	For the rest of our population, we have a history of low productivity and low wages, at much detriment to our economy, and needless disaffection among the young, as the noble Lord, Lord Layard, said. In many European countries, as we saw when we were doing our Select Committee inquiry, apprenticeship is an important way of dealing with a number of these problems. As has been said, I chaired the Economic Affairs Select Committee some years ago. The noble Lord, Lord Layard, was a driving force and was very helpful in educating us in a number of areas where we needed education. My impression was that there is a mighty challenge. I am most interested in hearing how the Government are setting about tackling it.
	I read, as I know a number of other noble Lords have read, with interest the speech made by my noble friend's colleague, John Hayes, on 29 September. It was a good speech and a lot of work went into it. It is clear that the Government are taking this seriously and making a number of initiatives. My worry is that they make too many initiatives. There have been enormous numbers of initiatives, but not enough follow-ups. It is partly the fault of Governments, in the sense that, in my experience, they have been for ever changing the structures of government. They put in a bright, young Minister in order to develop the policy on skills. The result of coming up with some sensible ideas is that he gets promoted to another job. The next Minister comes in and says, "Well, the way to get on in this world is to come up with another initiative". Instead of following up on the good initiative, he produces another initiative. Our report did not put it quite as bluntly as that, but that situation occurs with government. As a result, we have a much too bureaucratic system. While I accept that there are good employers at all levels, small and large, I know that a lot of small employers feel that the whole thing is too bureaucratic for them to get involved, so they do not.
	In essence, the problem is, first, that many young people leave school today without the basic functional literacy and numeracy required even to begin on apprenticeships. We saw that in the evidence that we took as we went around the country. There were kids wanting to do a good job-for example, work in a nursing home. Unfortunately, they could not do sufficient mathematics, so they were not even capable of dispensing medicine to patients. That is crazy. Secondly, many schools fail to inform their students about apprenticeship opportunities. I have a feeling that too many of our schools look on apprenticeships as a failure. They want to keep these kids on to become failures at A-level instead of saying to them, at the age of 16, "You have a real chance of a worthwhile career if you go into something else".
	The problems surround the apprenticeship programmes themselves. In my view, the Government have allowed individual employers too little involvement in how they are run, causing many employers to feel that they are just passive partners. This has been put more eloquently than I will say it, but employers need to be at the centre of apprenticeship provision. Apprenticeship schemes have suffered from too much emphasis on quantity rather than on quality. Completion rates for advanced apprenticeships are still too low, while progression through the different levels on to higher education also needs to be improved. Successive Governments have seen these problems, but they have not done enough about them, so we have a problem that is bad for the economy of the nation and bad for millions of young people who are missing out on a chance to improve their skills and earning capacity. That is a loss to the country.
	I will be most interested to hear what my noble friend has to say. We have had this problem since long before she came into the Government and long before the last Government took office; it has been there for a very long time. I hope that we will not have to deal with too many new initiatives, because we have had enough of those. I hope that she will show us the way to give a lead that helps the many employers who will not play their part at the moment because they feel that the schemes are too bureaucratic.

Baroness Jones of Whitchurch: My Lords, I add my thanks to the noble Baroness, Lady Wall, for initiating this debate. She has an admirable reputation for taking forward the work of the skills sector and has already made a significant contribution to this debate. As my noble friend Lord Sugar and others have identified, the previous Government had a great deal of which to be proud in terms of their experience in the apprenticeship world. They rescued the concept of apprenticeships and made them a realistic alternative training route for hundreds of thousands of young people with, as we have heard, more than a quarter of a million apprenticeship starts estimated to take place in 2010. In addition, their enlightened move to make all young people stay in education or vocational training until the age of 18, combined with the funds to make it happen, transformed young people's prospects and recognised for the first time in many years that alternatives to academic study were more attractive to many young people and could equally lead to successful careers.
	But this strategy was very much a work in progress. Although we were moving in the right direction, it requires continued commitment and investment to embed modern apprenticeships as a genuine alternative training choice for all young people, and it also requires a much greater buy-in from UK employers. A recent report from the London School of Economics, which may be the one to which my noble friend Lord Layard referred, identified that competitor countries still have much higher levels of apprenticeships. For example, England has only 11 apprenticeships per 1,000 employers compared with Germany, which has 40 per 1,000. Only 8 per cent of employers in England offered apprenticeships in 2009, whereas the much higher rates in Germany very well illustrate that apprenticeship is embedded in their culture and linked to a commitment to lifelong vocational upskilling. So the UK is missing out on a vital resource that would help in the industrial and technological race of the future.
	At the same time, City & Guilds surveyed employers in 26 countries and found that most believed that hiring students with vocational qualifications in the business sector was better than taking on university graduates, but they also admitted that only a small proportion of their apprentices subsequently went on to be promoted to senior management roles, thereby highlighting the problem that they are still undervalued by many in the business community.
	The baton has now been handed over to the coalition Government and it will be interesting to see how they intend to take the challenge forward. So far, I have to say that the omens are not encouraging. The first decision of the coalition was to water down the Conservative manifesto commitment to create 400,000 extra apprenticeships and college places in the next two years. Now there are no longer targets, only warm words and aspirations. As to the report of the Select Committee on Economic Affairs-I bow to the interpretation of its findings of the noble Lord, Lord Wakeham-I took away from it that the key to a successful apprenticeship policy is effectively to measure demand; how many employers would be prepared to create places and how many young people have been turned down on application. This would give the Government a clear steer and precise projections with which we could all judge whether they were being successful. Figures and targets matter.
	With this in mind, like others, I read with interest the speech by the Minister of State for Further Education at the Institute of Directors a couple of weeks ago. I was looking for evidence of the investment in training and apprenticeships which might be coming down the line. I was disappointed. The only figure mentioned was the reallocation of the £150 million train-to-gain budget which has successfully allowed 1.5 million workers the chance to experience workplace training, many for the first time. It seems that spending on these second chance learners, many of whom have had a poor initial education, is no longer a priority. Can the Minister clarify whether this is the case?
	In his speech, the Minister acknowledged the role that skills can play in stimulating growth. That is good; we can all agree with that. However, it is not clear how the Government are planning to invest in the extra training and apprenticeship places now to ensure that UK workers are skilled up and ready to take on the challenges of the new competitive world when growth kicks in. It is fairly obvious that training takes time-often years-so where is the funding and investment strategy from government to drive up our skills base and prepare us now for the new global business opportunities?
	Without drive and impetus the skills training agenda will go into decline. The latest unemployment figures mark a worrying trend-jobseekers up and vacancies falling; more and more young people joining the ranks of the unemployed. The fear of the recession is already skewing opportunities for vocational training. We now see unemployed graduates applying for vocational training opportunities which they would previously have regarded as being beneath them, while other young people who might previously have gone to university are applying for apprenticeships as a guaranteed job in a difficult economic climate, thereby squeezing out those for whom the posts were originally intended. So just at the time when we were beginning to establish modern apprenticeships as a respectable alternative career choice, demand is vastly outstripping supply, with the traditional target recruits facing rejection and disillusionment.
	Where are the new apprenticeships going to come from? Seemingly, not from the public sector. The anticipated level of cuts promoted by the Government across public services has created, effectively, a recruitment freeze. No new jobs are being created, not least in training posts. What is more, in the recent report of the Learning and Skills Council into barriers to creating new public sector apprenticeships, lack of funding was highlighted as a major issue, and this is clearly going to get worse. When cuts of this magnitude are contemplated, it is a sad fact that training budgets are the first to be hit. So, unless the Government are going to intervene and ring fence funding for public sector apprenticeships-which so far they have shown no intention of doing-we will lose a generation of newly-skilled young people ready to take forward the public services of the future.
	Already opportunities in the construction sector have been hit hard. The previous Government had ambitious plans to use the power of public procurement to drive up skills and apprenticeships in the construction sector which, in the recession, was increasingly relying on the public sector for business. However, the Government's deeply unpopular decision to cancel the Building Schools for the Future programme and to decimate the housebuilding grant to the Homes and Communities Agency has made a mockery of that strategy. It is clear that without active government intervention, the overall number of public sector apprenticeships will fall.
	So we come back to the central question: where will the new apprenticeships come from? I may be a cynic, but when the Minister of State talks about a new partnership between government, employers and the individual, I interpret it to mean that government will pay less and employers and individuals will pay more. I hope that the Minister will be able to disabuse me of this conclusion, not least because I do not think that such a strategy will work.
	I believe that, first, because, when the economic climate is tough, neither employers nor individuals will have the additional spare capacity to invest in skills training, particularly when the future is so uncertain. Secondly, is it not in all our interests, rather than those of just individual employers, that we have competitive, well qualified public and private sectors to compete on the world stage? I will be interested to hear what the Minister has to say on this. Most importantly, I hope that the Minister will be able to give us some real facts on how much the Government intend to invest in apprenticeships and skills training in the coming years and what their target recruitment levels for apprenticeships are. Only then will we be able to monitor whether this strategy is working and how successful it will be. I look forward to hearing her response.

Baroness Turner of Camden: My Lords, I thank my noble friend for introducing this debate and for the manner in which she did so. It is important that young people realise that apprenticeships provide access to skilled, respected and well paid jobs. Not everyone can go to university-many may not wish to do so-yet improving the skills base is important in securing our economic success. The previous Government understood this, hence their 2009 White Paper, Skills for Growth. Labour's £l.2 billion apprenticeships budget was a result of this.
	One of the problems in recent years has been the decline of manufacturing industry in many areas. It is now generally accepted that our economy has become unbalanced, with too much reliance on financial services. Many of us said this at the time-the trade unions said so-but no one was listening then. The image of trade unions, for which the media are largely responsible, is almost entirely negative. That is unfair. Unions have always played a substantial role in the training and further education of their members. I was for many years a union official. My union had always supported education and training for members. We supported Ruskin College in Oxford. I benefited from courses at Ruskin, to which I had been sent by my union, and many years later I became a governor there. Like many unions, we ran our own training college. Much of the collective bargaining in which I was involved was concerned with the training and re-training of employees, a large part of it relating to the introduction of new technology. Our aim was to keep people in employment-no redundancies-through training and re-skilling. That was the policy that we followed. The TUC has a learning and skills organisation, supported by all its affiliates. It is called unionlearn and has worked with public and private employers. It believes that a good skills base is good for the economy, vital to the recovery and in the best interests of both business and employees.
	It is true that there are considerable challenges. The UK Commission for Employment and Skills concluded that we need significant improvements if the UK is to be world class in productivity, employment or skills. Unionlearn believes that these improvements can be achieved. A union learning fund has been established to set up a network of learning representatives to raise awareness of training, to help build active learning partnerships between unions and employers, and to work on learning and skills.
	Of course, young people must be encouraged through the various routes available-many of them have been referred to in some of the very interesting contributions to this debate. However, I would be interested to know what the Government have in mind. It is widely acknowledged that many young men in particular face bleak prospects because of the high level of youth unemployment. Much more should be done to ensure that on-work training is available. The knowledge and experience of unions can be of great assistance in that regard.
	I have mentioned young men. However, when I was a member of the Equal Opportunities Commission, one of our campaigns that had some limited success was the WISE campaign-Women into Science, Engineering and Construction. It was led by our then chair, the noble Baroness, Lady Platt, who is herself an engineer. She spent a lot of time persuading schools and parents that this was a suitable career choice for their daughters. Apprenticeship schemes in manufacturing industry should also be available to women; they are no doubt a result of our equality legislation, but encouragement is often required.
	The debate about university funding and the Browne report should not sideline the pressure for access to apprenticeships and on-work training. Nor should there be attempts to cut expenditure in that area. We are talking about investment in our future-in all our futures. I await with interest the Government's response.

Lord Cotter: My Lords, it is good to speak on apprenticeships today, thanks to the noble Baroness, Lady Wall. The last Government initiated some good progress in the field, and it is welcome that the coalition is putting a big emphasis on apprenticeships as a vocational route for education. That is more vital than ever when there are considerable concerns about people having jobs, but also when the clear view of all is that we need to be a skilled nation.
	University education is important, but so is the acquisition of specific vocational skills. A recent report from the Apprenticeship Ambassadors Network said that apprenticeships in this country were among the world's best, which is welcome. However, the same report drew attention to the fact that, in England, only 8 per cent of big businesses offered apprenticeships in 2009, the lowest proportion out of eight countries studied. Those countries were selected as being similar to this country, seven being in Europe, and all with similar backgrounds to ours. It was stark to learn that, in the other countries, the percentage of big firms offering apprenticeships ranged between 25 and 30 per cent. Clearly, action is needed to get our big companies to step up to the plate, and to help them to do so.
	Still looking at the business perspective, it is clear that there is a great need for small businesses to be engaged; I am glad to hear that the percentage is quite high, but there is a great need to increase it, as for big business, because the small business sector is the backbone of the country. It has also often been said, but I say it again, that bureaucracy needs to be kept to the minimum to assist that process.
	Concerns have been expressed for some time about the low level of apprenticeships in the public sector, which must also be addressed. However, since much emphasis has been placed on the need for the private sector to provide jobs and stimulate the economy during these difficult times, the Government clearly need to encourage both sectors to engage.
	The issue of schools' career advice was raised by my noble friend Lady Sharp and others, but I add my voice to it. Careers advice must be of a high standard. It has been said that in England, as in France, schools are often hostile to work-based learning and provide little or no assistance. More than one report has indicated that careers advice is often not good enough at school level, when young people need to look to their prospects. I recollect hearing that apprenticeships have frequently not been referred to at all as an option; that must change.
	Apprenticeships are offered nowadays in many sectors, which is welcome, but we must not exclude traditional trades in which people use their hands. I came across an example recently where a young person wanted to find an apprenticeship for carpentry but could not find such an opening. I also remember hearing that quite a lot of skills that are important and which we had in the past have been lost. When I was on the Audit Committee, we were very concerned about the difficulty of finding skilled people to help with the maintenance and improvement of the parliamentary buildings. We should not lose sight of traditional crafts and of many others.
	I raise one point for the Minister to support. We need to communicate with employers about apprenticeships. I understand that this process was blocked by the Government's freeze on marketing and communication, which, for example, halted such communication by the National Apprenticeship Service. Fortunately, a partial exemption from this directive has been allowed for apprenticeships, but it is important that communication is increased. I hope that the Minister will consider what I feel is an important point.
	We are discussing today the need for an expansion of vocational education. In that connection, it is welcome that the coalition Government are promising an increase in apprenticeship places.
	On training, as the Leitch report said, we in this country have a serious problem with management and leadership. It is widely recognised that often the quality of managers is poor; only 20 per cent of our managers have a management qualification. We can spend much time on training and apprenticeships, but all this can come to nothing when, as sometimes or often happens, poor management skills lead to a waste of such talents.
	Clearly, the debate is welcome and a lot has come out of it. I am sure that we are all learning, as I have done, from many factors mentioned in it, and I hope that the Government, in their endeavours to increase apprenticeships, will listen. Clearly there is great support for apprenticeships, which is why this debate has been so important. I hope that the Government will address the many good points that have been made by many speakers.

Baroness Donaghy: My Lords, when I put my name down to speak in this debate, I had a conversation with my brother, who lives in Australia, and who worked for many years in the industrial maintenance of heating systems. He occasionally supervised apprentices. I asked him about his most vivid experience of working with an apprentice, and he replied that he once needed to climb a ladder to switch off a valve near the roof of a factory and asked his apprentice to "foot" the ladder. This was in the days before using a cherry-picker was considered a safe alternative for this sort of job. For those who are not sure, footing the ladder meant that the apprentice had to stay by the ladder and place his foot on the bottom rung to prevent it slipping. My brother emphasised the importance of not moving away from the ladder; he said, "If World War III breaks out, it is all right to shoot back but you do not take your foot off the ladder". This is beginning to sound like a Gerard Hoffnung record. When my brother had climbed to the top of the ladder to turn off the valve, he looked down before beginning his descent and discovered to his horror that the apprentice had moved away from the ladder and was talking to his mates about the night before. When he came safely down the ladder-and I shall interpret this for the House of Lords-he had to admonish the apprentice for disobeying his instruction.
	That anecdote taught me four things. First, I shall not be asking my brother for anecdotes ever again. Secondly, clarity of instruction, including warnings of the outbreak of World War III, does not always get through. Thirdly, there are boring aspects to all jobs, but they can prevent serious accidents, some of them fatal. Finally, inspiring and motivating is an important part of any trainer's armoury.
	My interest in apprenticeships stems from my time on the Low Pay Commission and from the inquiry that I conducted last year for the previous Government on fatal accidents in the construction industry. I was party to the original Low Pay Commission recommendations on apprentice pay rates despite their unpopularity even with my own union at the time. I am particularly pleased that the commission is having another look at this issue while maintaining the first principles of supporting a competitive economy, with the rates being set at a prudent level, being simple and straightforward and, finally, making a difference. I am sure that the Government will take its eventual recommendations seriously.
	The last Low Pay Commission report shows the distribution of apprenticeships as follows: 49 per cent in hairdressing, early years, health and social care, business administration and customer service, retail and hospitality; 26 per cent in that ubiquitous category "other"; and 25 per cent in construction, engineering, electro-technical and motor industries, quite a small proportion of which is in construction. While not trying to play down the importance of that 49 per cent, I cannot help thinking that these, on the whole, low-paying occupations find mutual benefit in employing apprentices on an even lower rate for eight months to two years. It is a very different situation in construction.
	I am a supporter of the construction industry, which consists of entrepreneurial, can-do people. It is vital to the UK economy and provides significant numbers of people with employment, but its record on apprentices is not good. As I wrote in my report last year, "All the major reports", written about construction,
	"refer to the industry's poor image and reluctance of parents to encourage entry into the industry as one of the major draw-backs ... As the majority of the workforce (approx 55%) have skills below NVQ level 2 or equivalent and approx 11% hold 'low or no qualifications' ... it is clear ... there is ... a long way to go".
	The structure of the construction industry-some would say its absence of structure-means that it is easier to poach from other companies than to train. That problem is not exclusive to the construction industry.
	During the inquiry we did a considerable amount of work through case studies. What emerged is that almost equal numbers of qualified but inexperienced workers and experienced but unqualified workers were involved in fatal accidents, so both elements are equally important. A well trained apprentice in construction is less likely to be a danger to themselves and, just as importantly, to others. This industry still experiences between 50 and 75 fatal accidents every year, and the under-recording of accidents leading to injury is a national scandal. Two of the cases that I came across involved young men who had received little or no training, who were not supervised and, in one case, who was given an instruction that was wholly inappropriate for his level of experience. I spent an evening with one of the families. What happened to their son-he fell off the roof of a factory and died-amounts to a life sentence for his whole family.
	More quality apprenticeships in construction will improve the industry, may save lives and may give more opportunity to those young people who 40 years ago would have followed their fathers into the coal, steel or car manufacturing industries, and who are so alienated in today's society. There are around six applicants for each vacant place in construction apprenticeships. There is no lack of interest, but the majority of construction companies fail to train apprentices. With some, that is because of genuine financial uncertainty. Where they do take on apprentices, however, the dropout rate is high. I was given many reasons for this: young people received a poor deal and were taught inappropriate courses; they were not really committed; or they received only 15 hours' training a week instead of 33 hours, which applied years ago. The picture is slightly better in Scotland, with eight apprentices for every 100 workers compared with 0.9 for every 100 workers in London, and the extent of self-employment must also have a major impact on training.
	The point was made by some organisations whose representatives I met that the narrowness of training sometimes adds to the risk on site, where a multidisciplinary approach is often expected. This led to workers performing tasks with which they were not familiar, another major cause of fatal accidents in construction. Examples were given of builders who installed solar panels but who were not skilled roofers and often put themselves at risk. Another point was made that the 16 to 19 age range for apprenticeships was not always appropriate for certain trades-for instance, sheeting and cladding, where a more mature approach was required.
	I called for a more flexible approach to apprentice training grants and a more targeted approach to certain specialisms. This would improve retention and qualification rates. In their response, the previous Government indicated rightly that this piece of work would be the responsibility of the main board of CITB-ConstructionSkills to address in the first instance. They indicate that:
	"ConstructionSkills may wish to explore the possibility of carrying out work to identify the underlying reasons for the non-completion of apprenticeships. This may also cover students in full-time college courses which some learners may believe are a form of apprenticeship. The research could also touch upon which specialist trades are most appropriate for 19+ year old apprentices".
	In making these comments about the shortcomings of construction apprenticeships, I wish to pay tribute to ConstructionSkills and the CSCS board for the work that they do. The construction trade unions also have an important part to play in their dedication to skills training.
	I urge the Government to pick up the baton on these recommendations, which the previous Government accepted in full. I also pay tribute to the work done by the business department in ConstructionSkills to co-ordinate efforts to rescue those apprentices where a job was no longer guaranteed after training. I hope that in any future discussion about the structure and financing of ConstructionSkills, the Government will bear in mind all the work that has already been done by Sir Michael Latham and Sir John Egan as well as the important initiatives taken by my noble friend Lord Prescott in this area. I thank my noble friend Lady Wall for instigating this debate.

Lord Liddle: My Lords, I, too, thank my noble friend Lady Wall for initiating this important debate. We have had a lot of interesting and impressive speeches, not least from my noble friend Lord Layard, who has contributed more to public policy in this field than possibly any other single individual, but also from a bevy of noble Baronesses on my side of the House who have spoken from their experience as trade unionists and have given a valuable illustration of the practical benefits that this trade union experience brings to this House.
	My own interest in this topic is that I was an adviser to the Secretary of State for Business in the final 20 months or so of the Labour Government and did a lot of work in this field at that time. I came to the view that, while the Labour Government had done so much, there was still an awful lot more to do. This became more critical after the 2008 crisis when it was clear that we needed to rebalance the British economy and move to real engineering from financial engineering. We will not do that unless we do something about our apprentice and technician training in this country.
	There is also a social issue. We need to find a way of providing decent jobs for people in this country who do not go to university. What we see is a terrible hollowing out of our labour market. There was a disappearance of what I call decent working-class jobs in the previous generation. In the knowledge and service economy we get a polarisation, with earnings racing ahead at the top and, at the bottom, many people in work but poor at the same time. The jobs in the middle that provided decent opportunities have disappeared. The only way we can rebuild that is through much more focus on apprentice and technician training. It is a mammoth economic and social challenge. The noble Lord, Lord Wakeham, was absolutely right: it has been a challenge for Britain for more than a century but it is even more urgent now.
	The fact that it is urgent is accompanied by a great fear that in the coming public spending cuts the resources for investment in this key challenge for Britain simply will not be available. I add a few reflections of my own on how the Government might try to avoid such a situation. First, it is essential that if the apprentice guarantee is to be effective, we have to get the schools much more involved in a vocational curriculum from a fairly early age. People talk about a vocational curriculum but it is a little more expensive to provide than so-called academic learning. As the per capita payments to schools are squeezed, which I fear they will be, there is a danger that the money for the expansion of vocational education will also be squeezed. I have a suggestion and I would like to hear what the Minister thinks about it. A pupil premium for children from disadvantaged backgrounds has been talked about. It is a good idea but let us have a premium for schools that not only take in a disproportionate number of children from disadvantaged backgrounds, but deliver good vocational outcomes. We need to give priority to that in our school system.
	Secondly, we have to use the money that is available for training as effectively as possible. The Labour Government concentrated a lot of money on basic skills and level 2 qualifications. There is a very strong social case for that. However, we ought, in a period when we have to be rigorous about our priorities, to focus on apprenticeships and workplace training. We have to provide better support than we so far have for advanced apprenticeships, as well as level 2 apprenticeships. When I was in the department, the idea of public support for advanced apprenticeships always caused much difficulty with the Treasury, which had a doctrine of market failure. Its view was that market failure applied at the bottom of the labour market but if apprentices were needed higher up the scale, surely employers would spend the money to provide the apprentices themselves. I do not think that has worked in practice for a long time. We must do something about it.
	We have to focus the available money on building partnerships with groups of employers to provide apprenticeships. The noble Baroness, Lady Drake, used the wonderful phrase "collaborative intervention". We must encourage more collaborative intervention by government to get employers to act. I agree with the noble Lord, Lord Sugar, that public procurement is a possible lever here. I also agree that we should be looking at so-called licences to operate as another vehicle-basically saying that you cannot do a job unless you have a proper qualification. When there is great pressure on public finances, the case for statutory intervention in this area, particularly on a sectoral basis, becomes a lot stronger in order to get employers to work together. We-certainly noble Lords on these Benches-will have to look at that again.
	Thirdly, we need to develop ladders of opportunity between basic apprenticeships, advanced apprenticeships, technician classes and between level 3, level 4 and degrees. I know that there are many problems attached to the Browne review but I was thrilled by its recommendation that the discrimination against part-time students that exists in the present system should be ended. That was a very positive feature of the Browne review. I rather agree with my noble friend Lord Bhattacharyya that we could make progress by enabling people to get loans for apprenticeships as well as for degrees. The fact that these loans are not available for apprenticeships in the way that they are for undergraduates is disgraceful discrimination against the working class.
	We also need expansion on the part of universities that concentrate on teaching-the post-92 universities. I am a director of one in Cumbria. They must focus much more on developing bridges between apprenticeships, technician classes and degrees. Those institutions will need a lot of help to make that adjustment. I should like to feel that the Government are aware of that need and will act on it. We should put apprenticeships at the centre of our economic and social policies. We need stronger partnerships with employers; to put funds and choices in the hands of students; to have real workplace experience in apprenticeships; and to develop pathways to advanced and higher levels of excellence. Only if we do these things will we have some hope of achieving the resurgence of private sector dynamism and jobs growth on which the coalition Government's future certainly depends.

Lord Young of Norwood Green: My Lords, I, too, thank my noble friend Lady Wall for giving us this opportunity to have such an excellent debate and I congratulate all those who have taken part in it. However, I shall not describe noble Baronesses in quite the same way as did my noble friend Lord Liddle, in case they indict me for political incorrectness.
	The noble Lord, Lord Wakeham, talked about bright young Ministers. I am not sure whether I was a bright Minister but I certainly fulfilled the criterion of being a "Young" Minister. I had the pleasure of dealing with skills and apprenticeships. I say that because, as a former apprentice, I have had a lifelong involvement with this matter. The noble Lord talked about there being too many new initiatives. However, some of those new initiatives were needed. The previous Government created a National Apprenticeship Service, for which I do not apologise as I consider that it was needed. We came up with the idea of an online vacancy matching service with regard to apprenticeships. Fortunately-fingers crossed-that computer service is still working and has not crashed. The noble Lord commented on the lack of employer involvement. I take issue with that view, as we have sector skills councils, which very much involve employers in the creation of apprenticeship frameworks and the development of apprenticeships. He talked about literacy and numeracy. As my noble friend Lord Liddle said, we invested a huge amount in, and achieved, improvements in literacy and numeracy.
	I could not help noticing that the current Secretary of State, Vince Cable, recently said that he was surprised that there were only 250,000 apprenticeships. I thought that it was lucky that he did not inherit his department in 1997. He would have been appalled, even flabbergasted, as then there were only 65,000 apprenticeships, with a completion rate of 25 per cent. I am puzzled by his surprise, but there are a number of things about the Secretary of State's recent statements that have surprised not just me but a number of others.
	In the previous Government, we tried to adopt a strategic approach. I only wish that my noble friend Lord Leitch was here for me to congratulate him on his report, which mapped out our problems in skills and what we needed to achieve. That is what we based a lot of our policies on. As a number of noble Lords have said, we introduced the Apprenticeships, Skills, Children and Learning Act, which did a number of important things. It legislated to give all suitably qualified young people the right to an apprenticeship by 2013, created the National Apprenticeship Service, created a statutory framework for apprenticeships and ensured that all young people at school receive adequate information, advice and guidance about apprenticeships. That, as the noble Baroness, Lady Sharp, reminded us, has not yet been achieved in all schools; my experience from visiting schools is that the situation is gradually improving, but it is not good enough. We should also remind ourselves that we gave 22 million workers the right to ask for time to train. Unfortunately, only a third of employers provide training; two-thirds of employers have not yet seen the light or they indulge in poaching. In terms of legislation, my noble friend Lady Jones referred to our raising of the participation age. That was another fundamental improvement for young people, who were told that up to the age of 18 they ought to be in either education or training.
	I put in a Written Question, which was answered by the noble Lord, Lord Shutt, asking how the Government were going to achieve their stated aim of an additional 50,000 apprentices. We all welcome the aim and Ministers have said that they will fund it by transferring money from the Train to Gain budget. That will have an implication in itself. However, putting that to one side, I asked what measures were to be put in place to achieve those additional 50,000 apprentices. As we know, it is one thing to say that you are going to achieve apprenticeships but it is another to realise that target. I was directed by the noble Lord towards the Government's Strategy for Sustainable Growth, but all it says, apart from a few warm words, is:
	"The Apprenticeship programme, newly refocused to prioritise progression to Level 3 and higher will help deliver the technician level skills that a dynamic economy needs. This year we will ... provide incentives to encourage provision and take-up of training in priority areas including a growth and innovation fund".
	The House needs to be assured on the detail of that because, unless you have a clear strategy to achieve those 50,000 places, the statement of that aim will, unfortunately, be just warm words.
	Another Minister of State, John Hayes, has been referred to a number of times. I cannot help feeling that he, too, is on a voyage of discovery, because he says:
	"I know that the work of GTAs (group training associations) has not been sufficiently recognised in recent years by the Government and its agencies. I know, too, that this neglect cannot be allowed to continue".
	I could not help bridling at that. We spent a lot of time and effort recognising the work of group training associations and, indeed, putting in additional money to encourage more of them to be created. Why did we do that? It is because GTAs are a means of ensuring that small and medium enterprises can gather together and cut the administration costs of employing apprentices. I suggest that the Minister of State does a little more homework before he makes that kind of comment.
	There have been many good speeches in this debate, but I hope that noble Lords and Baronesses will forgive me if I do not refer to all of them; after all, that is the Minister's job when replying. However, I will pick out one or two points. There have been a lot of references to both the cost and value of apprenticeships. I am making a plea for us to get the balance right. Of course there is a cost in employing an apprentice. However, we too often neglect the fact that apprentices also have real value. Not only do they foot the ladder, but they bring a lot of invigorating new ideas to companies. It is a two-way street. You need good-quality mentors, but the people who deal with young apprentices say that they are themselves enthused by their contribution. Apprentices want to get involved in real work as soon as possible.
	I pay tribute to my noble friend Lord Sugar for his contribution to that apprenticeship campaign. A lot of people expressed cynicism, saying: "What is the point of employing somebody like Lord Sugar for this? What does he know?". Well, as he reminded us, he proved his worth in the increased interest that we got from employers. I would not say that I agreed with every aspect of his assessment of the value of FE and other forms of training. We were reminded by my noble friend Lord Haskel of the vital contribution of FE colleges.
	I remind noble Lords who spoke about public procurement that that was also something that we did. We insisted that public procurement contracts must in future define how many apprentices there will be and what training will take place. There is sometimes a little collective amnesia in this area.
	The noble Baroness, Lady Sharp, reminded us about the collapse of manufacturing. It was not only the collapse of manufacturing that caused the decline of apprenticeships; that was also an unintended consequence of privatisation. The number of apprenticeships held in nationalised companies dropped alarmingly.
	My noble friend Lord Bhattacharyya made an interesting contribution. His point about loans for apprenticeships as well as universities was so good that I wish that I had thought of it myself; I can pay no higher compliment than that. Indeed, I was getting around to that idea, but he was ahead of the game.
	We should remind ourselves that the previous Labour Government guaranteed all 16 and 17 year-olds the right to an apprenticeship or school, college or training place by the end of September of each academic year. As I said, we wanted every young person to be in education, training or an apprenticeship until the age of 18. We had an education maintenance allowance for over 500,000 young people. We backed employment for young people with an investment of £1.2 billion in the Future Jobs Fund, which has unfortunately been scrapped.
	I do not have time to go into all the details of some of the other things that we did, but there has been a lot of talk about advanced apprenticeships. That was part of the previous Government's strategy, with three key parts. We talked about expanding the number of apprenticeships on offer by 35,000 to create a new class of skilled technicians. We intended to introduce skills accounts for each individual to invest in their education. There would also have been a radical simplification of the skills system.
	I liked the idea of the noble Lord, Lord Taylor, about celebrating apprenticeships. He will be pleased to know that a number of enlightened employers have graduation days for their apprentices. British Telecom is one. It is a really good idea: we should celebrate finishing apprenticeships. It is just as much of an achievement as when an undergraduate graduates.
	I have been told to wind up. In conclusion, I say this to the Minister. In a debate yesterday, she talked about getting the CSR out of the way. I do not think that we will get it out of the way: it will have long-term repercussions. I hope that the PricewaterhouseCoopers forecast yesterday about the loss of jobs in both the public and private sectors is wrong, because we do not think that unemployment is a price worth paying. I hope that the Minister can demonstrate how, as we go through this very difficult period, the Government will nourish and sustain apprenticeships.
	I will end on this note. We have often been accused by the Government of not fixing the roof when the sun was shining. We fixed the roofs of colleges when the sun was shining and when it was not. In 1997, the National Audit Office spoke of a crumbling infrastructure. I hope that this Government will improve on that record.

Baroness Wilcox: My Lords, it is wonderful to hear the former Minister speaking with so much enthusiasm that it is difficult to get him to sit down. I know that he enjoyed his job very much and I hope that he will be heartened by at least some of my words. I am grateful to the noble Baroness, Lady Wall, for bringing to the attention of the House such an important issue-one on which she is obviously well versed. Her knowledge of engineering apprenticeships was an education for me. With consultations shortly to close on the new government strategy for skills, and with the return to the airwaves of the much loved programme of the noble Lord, Lord Sugar, this has been a timely debate. Therefore I thank the noble Baroness, Lady Wall, and all noble Lords who have spoken. I am much encouraged and informed by what has been said. I was particularly moved when the noble Baroness, Lady Donaghy, talked about the construction industry. Her words will stay with me when I go back to my ministry and I welcome her to the House. I will try to address many of the points that have been raised. If I miss any of them because my time runs out, I will of course reply to noble Lords by letter.
	Apprenticeships are at once the most ancient and modern form of vocational training. As has been said, in this country their formal existence dates from the Middle Ages, but in places such as China they have been around for a thousand years. Confucius explained why apprenticeships work by saying: "I hear and I forget, I see and I remember, I do and I understand". The noble Lords, Lord Young and Lord Bhattacharyya, had experience of apprenticeships of very different kinds. Apprenticeships have touched for the better the lives of many noble Lords who have spoken today. They touched my own, because my father started his life's journey as an indentured apprentice to a master craftsman, to whom he referred with affection and respect throughout the whole of his subsequent career. I am sure that the noble Lord, Lord Sugar, would approve of this. The noble Baroness, Lady Sharp, also recalled this relationship at its best.
	Today, thousands of young people are benefiting from the excellent start to working life that an apprenticeship can offer-but they are open not only to the young. Noble Lords may have seen recent reports in the media about current apprentices in their 60s and 70s. There is hope for all of us if we get thrown out of here. One of the many virtues of your Lordships' House is its sense of fair play. It is in that spirit that I am bound to acknowledge that there is agreement on all sides of the House that apprenticeship training must be central to any Government's approach to skills. I go further and acknowledge that one of the undoubted achievements of the previous Administration was to bring about a significant expansion of the number of apprentices in training. My noble friend Lord Wakeham can be assured that we aim to build on those initiatives, and although I may not be a bright young thing whom the Government are likely to move on ever so fast, I hope that I will stay in this ministry long enough to make sure that everything stays in place for a while.
	I am convinced that, even in these straitened times, the task now must be not only to continue to increase the number and range of apprenticeships on offer but also to improve their quality. If we manage to do that, the historic promise that apprenticeships hold-of providing the right skills and knowledge to get on in life-will be delivered not just to some but to all apprentices. Happily, my conviction is shared across the coalition Government. In spite of the strain on the public purse, we all recognise the central place that apprenticeships must occupy in any successful work-based training system.
	I was rather disappointed that the noble Baroness, Lady Jones, was not able to recognise the clear commitment that this Government have made to apprenticeships. I hope she will see that I do a bit better as time goes on. I also hope that the whole House will have welcomed the commitment made in the coalition's programme for government to,
	"seek ways to support the creation of apprenticeships, internships, work pairings, and college and workplace training places as part of our wider programme to get Britain working".
	In the light of the Audit Commission's critical report on the Train to Gain programme, we redeployed £150 million of funding from Train to Gain to create up to 50,000 new apprenticeship places, which have been referred to today, in the current year. This is the way to deliver high-quality skills which are genuinely employer-led. In answer to a point raised by the noble Lord, Lord Haskel, the Skills Funding Agency and National Apprenticeship Service have been working alongside the further education and skills sectors to make those apprenticeship places available where there is local demand. They have reassured my colleague in the other place, John Hayes, that this process is going well and that we are on track to deliver our commitment.
	Among many examples of steps that the Government are taking to increase the supply of apprenticeships in areas that most need them, I shall choose just one. I know that the noble Baroness, Lady Wall, has a special interest in the Government's skills agenda. She may therefore have noticed that my colleague, the Minister with responsibility for higher education and science, announced that the Birmingham Chamber of Commerce and Birmingham Metropolitan College are creating 3,000 new apprenticeship places which are to focus on areas such as green technologies, business skills and high-tech engineering. I hope the noble Baroness will agree that this is exactly the sort of local partnership that we want to see more of.
	As the noble Lord, Lord Bhattacharyya, rightly said, in all our plans the apprentice can play a vital role in shaping the design and delivery of apprenticeships. I reassure the noble Lord that we see all apprentices as our most important asset in demonstrating the business benefits of the programme to employers.
	As for the future, my colleague in the other place, the Minister for Further Education, Skills and Lifelong Learning, John Hayes, has already publicly made clear our priorities on a number of occasions.
	Above all-here I am responding to the noble Baroness, Lady Sharp, and the noble Lords, Lord Layard and Lord Cotter-the Government want apprenticeships to become the gold standard for workplace training. They must become, even more than they already are, a form of training which employers are proud to offer because of the business benefits that apprentices bring, and to which prospective apprentices aspire just as much as people aspire to a university degree. As my colleague in another place, the Secretary of State for Business, Innovation and Skills, pointed out in his Statement on higher education funding back in July, there should not be a rigid dividing line between higher and further education. Why not take an apprenticeship rather than a traditional degree course?
	The noble Baroness, Lady Sharp, raised the important issue of careers advice in schools. Schools already have a clear obligation to ensure that pupils receive information about apprenticeships. The Education and Skills Act 2008 requires schools, in discharging their statutory duty, to provide careers education, as well as impartial information and up-to-date materials that present a full range of 16 to 18 education or training options. I reassure the noble Baroness that the commencement of Section 250 of the Apprenticeships, Skills, Children and Learning Act 2009 has been delayed pending the completion of that review. I should make it clear that that applies equally to the public and private sectors. Public sector employers have shown increasing commitment to apprenticeships and that should continue both for new staff, where those opportunities are available, and for existing staff. In government, it is important to practice what we preach and I am pleased to be able to tell your Lordships that there is an exemption to the current Civil Service recruitment freeze which allows departments to continue to recruit apprentices. I expect them to continue to offer apprentice places to existing staff also.
	The question of the noble Lord, Lord Sugar, on promoting apprenticeships through government procurement is a very important point. The Government, and the public sector more widely, wield significant influence through the contracts which they negotiate and, like the noble Lord, this Government are interested in looking at what more can be done to use that influence to encourage employers with public sector contracts to consider the skills needs of their workforce.
	To encourage more people in the public and private sectors to take up apprenticeships, the Minister for higher education and science announced only last week that people completing their apprenticeships in certain sectors will be given the title of technician. The National Apprenticeship Service will be working with the Technician Council and with the apprentices, providers and employers whom this announcement affects so that apprentices can soon proudly sport that badge of honour. I am drawn to the idea outlined by my noble friend Lord Taylor of a national apprenticeship day, commemoration stamps or anything else which will raise the expectation, the enthusiasm and the status of apprentices. Here I may be talking with prejudice, as I was brought up by my father who believed that universities were for people who thought and technical colleges were for people who did. I went to a technical college, so maybe I am prejudiced.
	I fully realise that our ambitions for apprenticeships require urgent action in four main areas. First, there is a continuing need to expand the number of apprenticeship places on offer, as the noble Lord, Lord Liddle, said. That is especially true of level 3 and above, where demand from employers for skills is growing and where the lifetime earnings premium of the apprenticeship is comparable with a degree.
	Secondly, as the noble Lord, Lord Aberdare, rightly said, we must create a much clearer ladder of progression within the apprenticeship programme. To that end, my department has already written to all sector skills councils asking them to develop level 4 and 5 apprenticeships' frameworks to match those which already exist in sectors such as engineering. We recognise that there is much more to do on that front.
	Thirdly, I say to the noble Lord, Lord Aberdare, and to my noble friend Lord Wakeham that we must make it easier for employers to offer apprenticeships by improving the information available to them and cutting unnecessary red tape. That is particularly true for small and medium-sized businesses which, as the noble Baroness, Lady Drake, emphasised, form the bedrock of the apprenticeship schemes in this country.
	Our final, and probably most difficult task, must be to reach a consensus on the right funding model for apprenticeships in our current circumstances and to establish a fair division of costs between the Government, employers and learners.
	An advanced economy needs people with advanced skills in order to grow and we need to use all our talents. Here I pick up the point made by my noble friend Lord Taylor. He pointed to the gender imbalance. I can reassure him that nearly 50 per cent of apprentices are women. However, he is right to note that that is not the case in all sectors. We have a huge task to break down entrenched gender stereotypes. We published a draft skills strategy in June and have been consulting with employers, learners and skills sectors over the summer. We will publish a full skills strategy to accompany my department's growth strategy after the spending review, which will set out in more detail how we intend to support our learning, skills and priorities.
	I hope that this will reassure the noble Baroness, Lady Wall, that the coalition Government are committed to driving up the skill levels of the workforce. Apprenticeships already make a tremendous contribution to society, but this Government intend to go further: they intend to ensure that they are improved and expanded so that more individuals and businesses can benefit from the opportunities that they offer. I end with the words of that great exponent of crafts and apprenticeships, John Ruskin:
	"The highest reward for man's toil is not what he gets for it, but what he becomes by it".
	Again, I thank the noble Baroness, Lady Wall, for bringing this debate to your Lordships' House.

Baroness Wall of New Barnet: I thank all noble Lords who have taken part in the debate this afternoon. I anticipated that it would be very interesting, but even I have been surprised by the things that I have learnt. I thank the Minister for her suggestion that she has learnt something today. I always take the view that if you participate in something but do not learn something, what was it all about? That applies to me and, I hope, to her, today.
	I do not intend to go through all of the various points that have been raised. To some degree, I share the views of my noble friends Lord Sugar and Lord Haskel about FE colleges. Some FE colleges are great; some are less than great. I know from my experience that there is a lot to do to build some of them up to be the very best. We owe that to the young people who are going through their apprenticeship off-the-job training with them.
	My noble friend Lord Sugar mentioned the importance of mentors. I ask the noble Lord, Lord Wakeham, whether he could recommend a mentor to me, because I am really disappointed that he did not suggest that he would give me an honorary degree. Obviously, I need to do better, and I can do better only if I am mentored.

Lord Wakeham: I thought that I said that if anybody wanted to make an application, I would do the best that I could.

Baroness Wall of New Barnet: I am verbally making the application, and I will make sure that I follow it up in writing.
	Again, I thank everybody who has spoken; it has been a tremendous debate, with lots of good suggestions. To refer to a comment by my noble friend Lord Young in response to the suggestion of the apprentices' day, he was being a bit humble, because he has supported me on a request on several occasions to come to a number of businesses to present awards to apprentices. The celebrations that happened on those occasions have been marked by big and small companies. I thank my noble friend, but I also thank the noble Lord for recognising, as the Minister described, that that is not only acknowledging what people have done but encouraging others in giving apprenticeships the value that they need. I beg leave to withdraw the Motion.
	Motion withdrawn.

Cyberattacks: EU Committee Report
	 — 
	Motion to Take Note

Moved by Lord Jopling
	That this House takes note of the Report of the European Union Committee on Protecting Europe against large-scale cyber-attacks (5th Report, Session 2009-10, HL Paper 68).

Lord Jopling: My Lords, this report on protecting Europe against large-scale cyberattacks followed an inquiry by the Home Affairs Sub-Committee of the European Union Select Committee. The chairmanship of the sub-committee is now in the safe and capable hands of the noble Lord, Lord Hannay of Chiswick. However, I was the chairman during the course of that fascinating inquiry and it therefore falls to me to open this debate.
	We published the report on 18 May, seven months ago, the inquiry having begun in November last year. It is a long time, with a very fast-moving subject, since we published the report, and it is unfortunate, for such a fast-moving topic, that we have been prevented-mainly, of course, by the dissolution of Parliament-from having this debate earlier. I know that this is a continuing problem for Select Committees, which spend a lot of time and put a lot of work into their reports and then have to wait for a long time before the discussion comes to the Floor of your Lordships' House.
	I called this a fascinating inquiry. Certainly for me, it opened entirely new vistas. I believe that that was true of many other members of the committee. The process of educating us fell to Doctor Richard Clayton, our specialist adviser, and I pay particular tribute to his expert knowledge and helpful facility for explaining things to those less expert than him. I especially want to thank our clerk, Michael Collon, whose expertise, both in the past and in a continuing way, is of huge value to the Select Committee. The debate today brings with it two maiden speeches to which I, for one, am eagerly looking forward. They are from very distinguished experts in this field, both former Defence Secretaries, and I look forward enormously to their comments in the context of this report.
	Anyone who doubts the havoc that successful cyberattacks can cause, and so the importance of protection against these attacks, needs to look no further than the opening pages of our report to see how in May 2007 Estonia virtually ground to a halt as a result not of, as it thought, activities by the Russian state, but perhaps more probably-no one is entirely sure-of activities by a number of disgruntled Russian students. More recently, noble Lords may have read about Stuxnet, a highly sophisticated virus designed to attack specific industrial infrastructure. It is so refined that many think that it could have been created only by a state. Computer systems in Iran have been particularly affected, and there is speculation that it could have been directed at one of the Iranian nuclear facilities-the Bushehr nuclear power plant or the Natanz uranium enrichment facility. There is no doubt that an appropriate virus of that sort could cause catastrophic failure at such a facility. That is a genuine example of cyberwar.
	Colleagues will be aware of a speech made this week by Iain Lobban, the head of GCHQ at Cheltenham, which was reported in the Daily Telegraph yesterday. He said that cyberattacks pose a threat that,
	"goes to the heart of our economic well-being and national interest".
	He went on to warn of,
	"the threat from terrorists, criminals and hostile states using the internet".
	He said that:
	"Government systems are being hit by email-borne attacks 1,000 times a month".
	Finally, he spoke of GCHQ,
	"detecting more than 20,000 malicious emails on government networks each month".
	Those are examples of the possibilities with regard to cyberattacks.
	I mention them for two reasons: first, as an illustration of the importance of protection against cyberattacks, although I am sure that noble Lords were never in any particular doubt about that; and, secondly, to make clear what our report means by cyberattack, since it is often confused with cybercrime. Cyberattacks are aimed at destroying or disabling major computer networks, such as power networks, communications or financial operations. They are obviously criminal acts. What is more accurately described as cybercrime is interference with personal internet security. By its nature, it relies on internet systems being up and running.
	The trigger for our inquiry was a communication published by the European Commission in April 2009, entitled, Protecting Europe from Large Scale Cyber-attacks and Disruptions: Enhancing Preparedness, Security and Resilience. The disruptions to which the title refers are those caused by major natural disasters, such as Hurricane Katrina in 2005, or major accidental damage, such as the explosion at the Buncefield oil refinery in December 2005, which destroyed the offices of a company running a payroll system for employers of one in three Britons. In that case, the disruption was potentially severe, but the effects were not. That is an illustration of a point that witnesses made to us repeatedly; namely, that the internet is remarkably resilient. One of our witnesses said that it was designed to withstand a nuclear war. Noble Lords may find that comforting. Certainly I do. But at the same time it still means constant vigilance and absolutely no complacency.
	The internet is global. Attacks are potentially global in scope and protection mechanisms must be prepared to meet global attacks. Our inquiry examined what role the European Union could play in defending the member states against attacks which would as easily come from outside the European Union as inside. Our conclusion was that much could be done only at local or at global level, but that there were also many areas where intervention at EU level could be helpful. However, the communication says little about the role of the European Union in a global context. That is unfortunate because there is no way in which any effective action can be taken at EU level without consideration of its effects at global level and the effects on it of global developments.
	Network security is largely in the hands of organisations called computer emergency response teams, or CERTs. These organisations study network security to provide incident response services to victims of attacks and to publish alerts against attacks. In the UK, many large companies have their own CERT, as do organisations which have a common interest. JANET is a CERT for the academic world which protects up to 16 million people who are probably mostly unaware of its existence. The Government have their own CERT to protect the public sector, but there is no UK national CERT-nor does the committee believe that there is any need for one. The current system seems to work extremely well.
	We were concerned that the Commission proposed that all member states should have national CERTs. We were hoping to read in the Government's response that they had no intention of setting one up in the UK. In fact, we read in their response:
	"The Government understands the argument that a national CERT would be of no added value to the UK, and that the current CERT network provides more effective protection. At this stage, we need to keep an open mind as to the best structures to support cyber defence and response in future".
	I am all for the Government keeping an open mind, but I hope that the Minister can assure us that they will not be setting up a national CERT just to satisfy the Commission's yearning for tidiness. This is a classic example of, "If it ain't broke, don't try to fix it".
	But that is not always the case elsewhere. While some member states have the same model as the UK and others have national CERTs that work well, yet other states have little or no CERT capacity and what they have is distinctly broke. In the case of these states, what the Commission proposes could be valuable. It will benefit the United Kingdom if other states have effective internet protection because we could suffer problems within the global network through ineffective protection in other member states. We suggested that in the member states where there are too few or inadequate CERTs, the Government should support this proposal. Their response did not address this and I should be most grateful if the Minister would give us that response today.
	Those who in the past have listened to debates on the European Union Committee's reports on home affairs will have heard me, on a number of occasions, deploring the lack of co-operation and co-ordination between the European Union and NATO. Protection against cyberattacks is a form of civil protection and one that is increasing exponentially in importance. After the attacks on Estonia in 2007, NATO became alarmed and stepped up its work in this field. So did the EU, but not in a co-ordinated way between them. We recommended, as we have before, that the two institutions should co-operate and co-ordinate rather than proceeding on their separate, parallel ways, and we urged the Government to intervene to make this happen. In their response the Government said that greater co-operation between the EU and NATO was a priority. I should be glad to know what developments have taken place in the mean time, and how successful they have been in pushing what they describe as "their own priority".
	In evidence to us, the then Minister for security, the noble Lord, Lord West of Spithead, was doubtful whether NATO had any part to play in protecting the internet, saying that he did not regard it as the appropriate body unless the security of an individual member was threatened. As his successor as Minister, does my noble friend Lady Neville-Jones share that view in the light of what I have just said?
	Lastly, I turn to the European Network and Information Security Agency. The Council decided that the agency should be sited in Greece, and the Greeks decided that it should be sited in Crete at Heraklion. They do not seem to have given any consideration to the problem of recruiting and retaining specialist staff in a remote place which has no international school, nor to the fact that it can mean up to two extra days of travelling time for those attending meetings, especially in winter when flights are very limited. We recorded the criticism and frustration that this has aroused, but we accept that nothing can be done at this stage to reverse the situation. However, we welcomed the decision of the Greek Government to make office space available in Athens for meetings, eliminating the need to go to Crete. I am glad to read in the Government's response that this arrangement is working well.
	At this stage I should like to suggest that in the future, when the European Union is sharing functions around the member states, the allocation should not just define the state concerned but also where that state intends to locate it. The Government say that the location does not seem to have resulted in an inability to recruit and retain staff, but in the next breath in the response they add that,
	"it is clear that the location is a major factor when professional staff consider applying for posts".
	This seems to imply that the persons best qualified may not be applying for jobs. I hope the Minister will say whether or not this is so. I am far from suggesting that only second-rate persons apply for these posts, but it would be unfortunate if the best are inhibited from applying. This would be particularly the case for applicants from the United Kingdom, which is about as far from Heraklion as it is possible to get within the European Union.
	ENISA was originally set up with a five-year mandate. This was extended by a further three years, expiring in March 2012. We expressed the hope that agreement could be reached well before then to extend the remit of ENISA to cover matters such as police and judicial co-operation over criminal use of the internet. Within the past two weeks, the Commission has issued two proposals. The first would simply extend the mandate by a further 18 months, expiring in September 2013. The express purpose of this is to give time for consideration of a second proposal; namely, a revision of the regulation setting up ENISA.
	In its Explanatory Memorandum to the regulation, the Commission said that it had considered three options. It agreed to some expansion in the tasks of ENISA, adding law enforcement and privacy protection authorities as fully-fledged stakeholders, but it decided against adding either fighting cyberattacks or the response to cyberincidents, or supporting law enforcement and judicial authorities in fighting cybercrime. This is a rather timid move and is not in accordance with the rather bolder suggestion in our report. We expect in due course to receive from the Government their own Explanatory Memorandum of their views on this, but I should be grateful if the Minister could today give the House some indication of their thinking about an extension of ENISA's role. What I would hope to hear is that they share our view and intend to press for further expansion of ENISA's remit in the course of the negotiations on this proposal.
	I have come to the end of what I want to say on this fast-moving topic. The United Kingdom, the EU and, indeed, the whole civilised world must keep a step ahead of potential attackers. The previous Government seem to have recognised the importance of this and to have taken decisive steps to counter the threat. I hope the Minister can confirm that the coalition Government will continue on this path and, particularly, encourage the European institutions to play a useful part. I commend the report to the House. I beg to move.

Lord Reid of Cardowan: My Lords, I am delighted to make my first speech in this Chamber, particularly in the company of my noble friend Lord Browne. I do not suggest that this is as fair a pair of maidens as has ever graced the Chamber, but I hope that our contributions will in some way illuminate the deliberations here. I am also pleased to be making my first contribution during such an important debate and discussion-albeit late in the day and late in the week. Nevertheless, I thank the noble Lord, Lord Jopling, for introducing it and the noble Baroness, Lady Neville-Jones, for the response that she will give on behalf of the Government on such an important issue.
	I declare a manifest interest in these matters, as registered, not least as chair of the Institute for Security and Resilience Studies at University College London, which attempts to address some of these difficult issues.
	I had the honour of serving for almost quarter of a century in another place and in one or two ministerial posts-there were about nine, actually-at the behest of the last Prime Minister but one, my friend and colleague the right honourable Tony Blair. During that time, I hope that I gained a little experience with which I can contribute in this House. I was always impressed by the wisdom of this House. The first part of that wisdom is to recognise that, when one comes here, whatever one's experience, such is the experience already vested here that it would be extremely wise to approach the place not with pride but with a degree of humility. So I do tonight, in the company of some honourable and right honourable previous friends, now noble Lords, who have graced this Chamber with their views on security matters. I thank them and all the staff for the welcome that I received when I arrived here. It was warm; it was cordial; it was hospitable; and, for those of us who came from another place and were more used to the Jeremy Paxman approach to building relationships, it was disconcertingly fraternal from every other point of the House. I thank everyone for that.
	I should also place on record my thanks to my constituents in Lanarkshire, who until the last election gave me loyalty and support for some 23 years and who in their wisdom have now chosen the baby of the other House, Pamela Nash, who, at 25 years of age, brings to the post of MP for Lanarkshire the youth, grace, dynamic approach, energy and attractiveness that have always marked Lanarkshire MPs. I wish her well. At 25, she has, I am sure, a long and very successful future in front of her.
	It was in Lanarkshire, that area of coal, steel, comradeship and what we called the craic, that the character, values and world views that I now hold were first forged. It was there that I first saw, through my parents-Tommy, a postman, and Mary, a factory labourer-and our neighbours, that potent combination of features that have formed the basis of my outlook in politics. It is a combination of individual personal aspiration, community solidarity and indomitable endurance in the face of adversity. Though the material conditions that gave rise to that particular holy trinity of elements of political philosophy have now disappeared, the potency of their inherent value remains within the culture and character of this nation as a whole. Any political party that fails to realise that and abandons those three characteristics will fail to connect with the electorate. The true dynamo of our society is not the actions of politicians or the intervention of the state but the aspiration of ordinary men and women to forge a better life for themselves and their families than they inherited from their parents. The role of the state in these matters-this is part of personal security-is to act as a platform to help people to realise their ambitions. It is never to act as a substitute for those ambitions. If it ever becomes that, it will only stifle the growth and dynamism that is within the British culture.
	It was also in Lanarkshire that I was first acquainted with the essential problem depicted in tonight's debate-that of digital communication, transfer of information and cybertechnology, with all its opportunities and challenges. I want briefly to tell a story, because it illustrates how the world has changed. Just under 25 years ago, on 3 January, I set out with 12 others to walk from Gartcosh in Lanarkshire to London in an attempt to retain the Gartcosh steelworks. We believed that, if the steelworks went, that would be the precursor of the decline of steel and 25,000 jobs in Lanarkshire, as happened subsequently. As we set out on the journey, I was given-by a Scottish newspaper, the Daily Record, if I remember correctly-the latest in global human technological communications. It was called a mobile phone. It looked like a brick. It weighed the same as a brick and was just about as effective as a brick when it came to telecommunications. It had to be charged overnight for 12 hours and it lasted for two hours, provided that you did not make any phone calls. However, it was a revolutionary transformation in communications. In its essence, it was a leap change from anything that had gone before. It was the beginning of a global revolution.
	I recalled that experience earlier today when I was reading the report on cyberattacks to which the noble Lord referred. In the past 25 years, we have travelled further and faster in human communications and information exchange than in all the previous millennia in aggregate. That is the true meaning of a globalised world. It is a world that is becoming more complex and more difficult to understand. It is a world in which, for the first generation, parents have been taught by their children how to communicate through the internet. But it is a world that we in this House must attempt to understand because, if we do not, we will not understand any of the problems that we face.
	Perhaps I can convey it this way. I do not know how many noble Lords have read Stephen Hawking's A Brief History of Time. I commend it to everyone in the House, although I could not understand anything beyond chapter 4. One element of it gives us a model for understanding the present world. His contention is that, if we could understand the laws that govern the movements of the smallest things in the world, or quantum mechanics, and combine them with the laws that govern the movement of the largest things-planets and the general theory of relativity-we could understand the mind of God.
	I am far too modest to claim that I will explain the mind of God tonight, but if we want to understand the world in which we live we should start with the smallest thing, the microchip, and combine it with the largest process, which is globalisation. "Globalisation" is a word that it is continually used but rarely defined. It has two characteristics. It is a network world-its first characteristic is the interchange of finance, trade, goods, people and ideas, which have been enabled by digital communications. But it also has interdependence. We are now so interlinked to that network world that, if swine flu starts here, it spreads rapidly everywhere. If a financial crisis starts somewhere, within days it can spread throughout the globe. If a foreign country cuts off our energy, it can cripple us.
	Nowhere is that vulnerability from interdependence clearer than in network capabilities. A few days ago, the Secretary of State for Defence pointed out, correctly, that if someone were to explode a nuclear weapon in the skies above this country, the electromagnetic pulse would bring down all our networks. That is accurate, but there are three problems with sending such a nuclear weapon. First, it is very costly. Secondly, it takes years to develop. Thirdly, people can generally tell where it came from and spot the culprit. If you wanted to bring down the electronic systems on which the whole of this country is now based, why would you send an expensive, long-developed, easily identifiable intercontinental ballistic missile when you could do it with a mobile phone? It is on one of 32 platforms that would enable you to cripple someone's network and it is developed cheaply by other people. The great thing about sending a message on it is that you can disguise where it came from. If noble Lords think that that is big, let me tell them that in 2008 the biggest intervention of a virus in the American security system was done quite simply with a memory stick, which was given to a member of the American military/security forces. It was a handy gift; he put it in his laptop, plugged in and logged on and, within hours, the virus was all over the American security system.
	Weapons that attack us no longer have to be frigates or sophisticated military systems. They do not have to be expensive and they do not have to give away the attacker. That is the nature of the problem that we are facing. As the good Lord said, it is growing exponentially. I spoke yesterday to somebody from Sophos. When noble Lords turn on their parliamentary machine, they will see that they are protected by Sophos. He told me that last year Sophos found 5,000 incidents of Malware every day among their clientele-that is, interventions of a non-benign nature. This year, there are 80,000 a day. At present, the American security system and the public sector in America receive interventions that are unsourced and unidentified to the extent of 250,000 every hour.
	There is a vulnerability here that we must try to understand, although we have come late to it. I hope that, as we address it, we will remember one thing-the renowned wisdom of this House. As I said, this device is a means of production of communication but also a potential source of vulnerability, which has been learnt by children and taught by children to parents. It is to be expected in a House like this, for all our wisdom, that we might not be as au fait with technological advances as the younger generation. However, we ignore this at our peril. It should be at the front of our considerations here; I know that it is at the front of the considerations of the noble Baroness who will respond tonight and I hope that it will be at the front of the Government's security deliberations and their conclusions next week. Above all, I hope that, in the course of that debate and in the midst of the wisdom and experience that exist already in this Chamber, I can make some contribution towards our deliberations.

Lord Harris of Haringey: My Lords, it is an enormous pleasure to follow my noble friend Lord Reid of Cardowan and his maiden speech, in the course of which he paid a very graceful tribute to his successor as Member of Parliament. He told us that she had already attained the ripe old age of 25. I am informed that the noble Lord started his political career some considerable period earlier than 25. I am told, in fact, that he led his first strike at the age of about 14 and a half when he was still at school and was objecting to the practice of the fairly disciplinarian head teacher that the children should be kept outside, irrespective of the weather, until the school started. He called a strike of his fellow pupils on the basis that, if they were not allowed in until nine o'clock, they would not go in after nine o'clock. My understanding is that he was successful in that, which demonstrates a robustness and forceful nature, which we have seen in this afternoon's speech. However, we have also seen the noble Lord's other side-his erudite and thoughtful nature. I understand that it is that side that comes in particularly useful in his latter-day role as chairman of Celtic Football Club, where erudition and thoughtfulness is particularly important.
	The noble Lord has had 10 years in very senior roles as a member of Her Majesty's Government. He was in the last Government what I think should be described as a "big beast", with the emphasis on some occasions on the word "beast". I worked closely with him in a number of those roles, in particular in his time at the Home Office. One of the achievements of that period is a lasting one: the creation of the Office for Security and Counter-Terrorism. This country will learn to realise how significant and important it has been, and that is down to my noble friend. His contribution today has demonstrated the qualities of robustness and erudition that we will all expect to hear much more of in the time ahead. We do indeed look forward to many further contributions of a similar nature.
	I am grateful to the noble Lord, Lord Jopling, for his introduction of the report and his work, and the work of his colleagues, in pulling together the report which we have had. It is a very important Select Committee report, and I had the privilege of sitting in on a couple of the evidence sessions to hear the discussion. As the noble Lord pointed out, we are having quite a timely debate following the reported comments of the director of GCHQ in the past few days. He has talked about the significant level of attacks on government systems, many of them precisely and deliberately targeted at those systems. The debate is unfortunately not quite as timely as it might be in that we do not yet have the benefits of the results of the security and defence review or the comprehensive spending review. We will have to wait a few more days for those. However, I hope that that fact of timing will not prevent the Minister from providing us with some more information on how the Government's thinking on these matters is developing.
	I have high hopes for the noble Baroness, Lady Neville-Jones, because I am aware of her continued personal interest in matters of cybersecurity and information assurance. I have attended so many meetings over the past few years which she has been at, and which have discussed these matters, that I know that she takes these matters extremely seriously. That includes, for example, her chairing for a period the Information Assurance Advisory Council, which brought-and continues to bring-together industry, academia and government to talk about these matters. We have high expectations of the Minister in what is going to be done in this field over the months and years to come, and I am sure that she will not disappoint us today in her response to this debate.
	It is important that we recognise several elements in the issues around cyberattacks and the matters which this report has covered. A few years ago, a lot of these matters were dismissed as the actions of teenage cyberjuvenile delinquents who were merely interested in getting into systems because they were there and, perhaps, in gaining some element of self-respect by leaving their mark on those systems, proving that they had been there-a sort of petty vandalism, expressed in the cyberworld as opposed to the physical world that other juvenile delinquents might be engaged in. Yet we have to recognise that those juvenile delinquents have grown up. Some have grown out of those issues, but others have started their own criminal enterprises; some have been bought up by much more organised and serious criminal enterprises; some have, no doubt, become fundamentalist in their religious views; others are being employed by nation states. We have to recognise the scale and effectiveness of the targeting that can now be done.
	We therefore have not only the continued action and vandalism of the juvenile delinquents but the issues around cyberactivism, of people trying to make a political or other point by mass cyberaction. We have small-scale crime, but more significantly we have an enormous wave of organised crime using the techniques that are now possible through the internet. That is now having an effect. We also have otherwise respectable businesses making use of these criminal techniques to inform themselves of their competitors' activities and, indeed, trying to obtain intellectual property. Then we have state-sponsored activity, some of it at the commercial end but some of it much more about creating the opportunity to attack other nation states if that is necessary. The noble Lord, Lord Jopling, has talked about what happened to Estonia, and numerous incidents are now reported of what are perceived as being-although this is not necessarily the case-attacks sponsored by one nation state against another in this sphere. We have yet to see a serous terrorist act perpetrated through these means, but it is only a matter of time before terrorists also make use of these techniques as an adjunct, as part or as the main focus of their attack.
	We therefore have to examine the issues raised by this report in a number of ways. First, while they might not quite meet the definition that the noble Lord, Lord Jopling, gave of a cyberattack, the activities of serious and organised criminality in terms of fraud and all the things that it is trying to do are of such a scale that Governments-national, Europe-wide and worldwide-should be taking them seriously and acting on them.
	Secondly, we have to look at the scale of what is happening in terms of corporate raiders, intellectual property theft and the potential for industrial disruption. Again, some of this is by organised crime, but my understanding is that a significant proportion of that is carried out by nation states or at their behest.
	Thirdly, and this is particularly important in terms of the responsibilities of our Government and the Minister, there are issues around the attacks on, and the vulnerability of, our own critical national infrastructure. Some of those attacks on government systems are about espionage, but some of them are about creating the potential for disruption.
	I have a number of questions or issues that I hope the Minister will be able to respond to. The first relates to the sheer volume of criminality and whether as a nation we are equipping ourselves to keep up with those who are trying to defraud our citizens or otherwise cause problems. There has been a history of law-enforcement initiatives taken in this field. The National Hi-Tech Crime Unit, which was very successful, appeared to disappear when its responsibilities were taken over by the Serious Organised Crime Agency, so much so that the police had to set up a new unit, the Police Central E-Crime Unit-I declare an interest as someone who has been closely involved in that, as a member of both the Metropolitan Police Authority and the ACPO board that oversees it-which has had a series of successes, like the arrests a few months ago of the five men and one woman engaged in stealing the details of more than 10,000 bank accounts and allegedly netting themselves more than £3 million as a consequence. That unit, working with the private sector and levering in resources from it, has been remarkably successful, but it is still new and fairly fragile.
	I understand that there are rumours that this unit should be subsumed into the proposed new national crime agency. I have no objection to the new agency, once it is established, maybe taking on this responsibility; it must certainly have a capacity to deal with these matters. My concern is that if we move too quickly to that process, the idea of subsuming a body that is only just beginning to work into a new body that will be going through its own birthing pains is not necessarily sensible. We have had evidence from the outgoing chief executive of the Child Exploitation and Online Protection Centre about the fragility of those structures and the private sector funding of them. He suggested that Microsoft may propose to withdraw the resources that it puts into CEOP because of the uncertainty about its future. I hope that the Minister will give us some assurances today about the continued budget to enable the police to play their role in fighting e-crime, that we will not see the fragile new arrangements subsumed too early into a national crime agency and that there will at least be time for any national crime agency to be established, and to establish itself, before such a change takes place-if that is what happens.
	The second issue was referred to by the noble Lord, Lord Jopling, when he talked about the so-called Stuxnet attacks on the control systems of the Iranian nuclear power programme. I have been concerned, as have several noble Lords and others, about the vulnerability of SCADA systems to attack. Is the noble Baroness personally satisfied that enough is being done at present to protect such control systems for our critical national infrastructure, against both the sort of electronic attack that the Stuxnet attack seems to have been and the electromagnetic pulse attacks that the noble Lord, Lord Reid, referred to? He made the valid point that exploding a nuclear device might be rather a visible way of producing an electromagnetic pulse. However, there are regular cycles of sunspot activity that could produce the same sort of effects. The issue of protection remains, whether it is an external attack, a natural event or something triggered electronically.
	I would also like the noble Baroness to tell us whether enough is being done to protect the intellectual property of the United Kingdom against electronic attacks. In this context, is she satisfied that the major contractors that provide services to government departments are themselves adequately protected against this sort of penetration? I have heard stories about some of those major contractors being heavily penetrated in possibly state-sponsored incidents. If that is the case it is extremely serious. It is important that the noble Baroness should give us her assurance as to what can be done.
	Finally, I hope the noble Baroness will give us, in the course of her remarks, a route map that tells us who is in charge of the various key elements of this matter. Who is in charge of setting the standards of security for our critical national infrastructure? Who is responsible for attributing where attacks are coming from? Who is responsible for managing resilience and recovery, should an attack take place? Who is responsible, if necessary, for retaliation or taking out those who are carrying out these attacks?

Baroness Hamwee: My Lords, I thank the noble Lord, Lord Jopling, for introducing this debate. I am glad that there are people who understand all this and can speak the language and handle the acronyms. I use that thought to evade the rule that there should be only one formal thanks to maiden speakers before the winders. I am very glad that we have a "big beast" who was able to get his head around the issues sufficiently to start a new area of work. I am not sure that I should refer to the Minister as a big beast other than intellectually and, to be even-handed, as someone who also has a track record in security.
	The noble Lord, Lord Harris, and I briefly discussed the report the other day. Although his speech did not tend in this direction, we agreed at the time that this amounted to something very serious and that something should be done. I tend to see that thought in the report, where we read:
	"There was consensus among our witnesses that this was a legitimate area for the EU to be concerned about, and that it had some role to play, but there was no unanimity as to what that role should be".
	I suppose that is formal speak for the same thought.
	This is a report about the EU but I entirely take the point made in the speeches we have heard so far that this is a global issue. I was not surprised to read that American witnesses were encouraging about the role of the EU as distinct from national roles. This is a global issue. The phrase "asymmetrical development" is a very polite term for describing the problem of the lowest common denominator.
	This is not just about the EU and it is not just about government. As the noble Lord, Lord Harris, said, it concerns every sector from contractors to government departments and the services provided by the private sector. We heard about Northgate but utilities could be affected-the water services, to take one-and traffic lights. The list is very long indeed and it does not take a lot of imagination to get beyond the jargon and think about the real problems that a cyberattack could cause.
	I very much agree with the committee that it is for the public sector to take the initiative and offer a real say to experienced internet entrepreneurs in how public/private partnerships are best developed and not leave it to the private sector to come forward with ideas.
	While I take the point made by the noble Lord, Lord Jopling, that this is not about cybercrime, like the noble Lord, Lord Harris, I will be interested to hear from the Minister about the role of the new National Crime Agency. Behind technology of any sort are people. That comes through very clearly in the committee's comments on ENISA. The noble Lord, Lord Harris, referred to juvenile delinquents. I sometimes wonder whether states should thank innocent or naive hackers for showing them where problems and weaknesses arise.
	The other day I heard a tale from Bletchley Park about a code-not Enigma-which was cracked because the transmitter of a message in code realised that he had made a mistake and transmitted a second message correcting it. That gave those at Bletchley the material to be able to crack the code. It is individuals who can, in what might appear to be small ways, undermine the security of systems.
	I, too, am interested in resilience to cyberattacks, the work that is going on and that which can be undertaken in this area-that must be harder to tackle at an international level than at a national or local level-to anticipate technological aspects and human reactions in dealing with cyberattacks. I know that I am not the only person in the Chamber who has heard about what went on immediately following the 7 July bombings. One of the problems of which we became aware pretty quickly was people's tendency to use mobile phones and the effect that had on the mobile phone networks. It is a very human reaction to pick up a phone to find out whether one's family is safe. I wonder whether any thought has been given to involving the media in resilience exercises. I take this lesson also from 7/7: the media have a very important role as people tend to turn on their televisions and radios.
	Finally, as result of work that I and other Members of the London Assembly did following those July bombings, I keep in mind the words of the then managing director of London Underground. He said that the big lesson for us was:
	"Invest in your staff, rely on them. Invest in technology, but do not rely on it".

Lord Browne of Ladyton: My Lords, it is a great pleasure to follow the noble Baroness in contributing to this debate. I will not follow the threads that she pulled from it because this is my maiden speech and I am constrained to be, what some might say, uncharacteristically brief. I commend her on her contribution to the debate and the issues that she picked from this helpful report-and more broadly. I, too, await the responses of the Minister to the points that she raises.
	As I rise to make my maiden speech, one view is that it is a contribution to the House of Lords that I have waited 14 years to make. In 1996, I was part of the legal team that injuncted-or interdicted, as we say in Scotland-the BBC from broadcasting an interview with the then Prime Minister John Major in the context of the local government elections in Scotland. We were told after the appeal in Scotland that the BBC would take us all the way, and it was granted permission to appeal to the House of Lords. I had my foot almost on the first step of the stairs to the London shuttle when the BBC abandoned its appeal. So while it is characteristic for many maiden speakers in this House to say that they never expected to speak in the House of Lords, I suppose that in my case it could be said that my expectations have waited 14 years to be fulfilled properly.
	In those 14 years, I found myself another job as I waited. It was a significant honour and a pleasure for 13 of those years to serve my constituents of Kilmarnock and Loudon in the other place. They are now represented by Cathy Jamieson, who is already an experienced Member of the Scottish Parliament, and indeed was a Minister in the Scottish Executive. She is an excellent Member of Parliament, and that is not just my view but is the view of her constituents who have granted her an even more impressive majority than the healthy majority that I enjoyed during the time that I was there.
	It is a particular pleasure to speak in the debate following my noble friend Lord Reid-a habit that I have developed over the years. I shall come to that in a moment. We both learnt our politics in the robust environment of the Labour Party in the west of Scotland, and I can tell noble Lords that we have had a lot of similar experiences, but I know that his collection of anecdotes-or at least the way he tells them-are much more entertaining and certainly more exciting than mine ever were.
	After re-election in 2001, my ministerial career was largely spent following my noble friend. I will always be grateful to him for the experience of working with him in the Northern Ireland Office. In many ways, that was the happiest time of my varied ministerial career and I am proud to say that I still have many friends there. That is perhaps not surprising, as my mother-an inspirational 95 year-old-hails from Warrenpoint in the stunningly beautiful County Down. My time in Northern Ireland encouraged my interest in conflict resolution; and that was reinforced by later experiences of conflicts. It is my intention to use the opportunities that my membership of your Lordships' House generates to work in that area, among others.
	My services as a Minister in the Department for Work and Pensions, the Home Office, the Treasury and the Scotland Office have all individually left their marks on me, but it was my time as the Secretary of State for Defence for two years, between 2006 and 2008, that left the greatest impression. Over my ministerial career, I have developed a significant admiration for the public service of our Civil Service. It has become fashionable to talk of "bloated public service" and of waste, but that is not my experience. In my view, we have the best civil service in the world, which is part of the construct of this land that makes us all proud to be British.
	However, if my admiration for the Civil Service is substantial-and it is-my admiration for our military knows no bounds, after my experiences. The courageous selflessness of those who put their lives and health at risk in order that we can sleep safe in our beds at night deserves a form of thanks for which the English language has recently proved to be woefully inadequate. The sadness and grief that I felt when hearing the news that my friend Lieutenant-Colonel Rupert Thorneloe, the commanding officer of 1st Battalion Welsh Guards, had been killed action in Afghanistan, was but a fraction of that suffered by his wife Sally, his precious daughters and his parents and family. The sacrifices that the families of our service men and women make in supporting them are equally worthy of our boundless gratitude.
	My time as Secretary of State for Defence has left me with the conviction that disarmament is as important to our security as investment in the capability of arms. Many senior political leaders across the whole world are currently coming to the conclusion that the existence of nuclear weapons, the security challenges that they pose and the risk of their proliferation are among the greatest threats that this world faces. I agree with them. With the support of a significant number of senior Members of your Lordships' House and of the other place, I intend to devote myself to the advancement of multilateral nuclear disarmament, improvement of the non-proliferation regime and improved nuclear security.
	That brings me nicely, through security, to the topic of today's debate. I pay tribute to the noble Lord, Lord Jopling, and his committee for their deliberations and for the important and extremely valuable report that they have presented to us. As we have already heard, in recent days we have seen both an attack-we know not from where-on the computer systems running the Iranian nuclear programme and a warning from the director of GCHQ on the need to enhance the UK's cyberwarfare capability, both offensive and defensive. The publication of the Government's strategic defence and security review is imminent. As a review, it promises to go much wider than a traditional defence review in assessing the full range of security challenges facing our country and in providing a joined-up response to those challenges. I hope that it achieves what it sets out to achieve, but the public debate currently surrounding it is has not been encouraging. Almost all of the attention, inside and outside government, appears to have focused on the overall size of the defence budget and on which big-ticket defence equipment may have to be scrapped to satisfy the Treasury. This is understandable, given the current economic and financial picture, but it does not amount to strategic thinking. I hope, and wait to be reassured, that the review is conducting that strategic thinking and that the leaks we have witnessed over months have not included it.
	As I know the Minister also appreciates, a review of this kind, carried out at this point in our history, needs to focus on more than conventional defence equipment. The nature and character of conflict, and the nature and character of weaponry, is changing. This is not just about unconventional enemies using low technology weapons like those we face on occasion in Afghanistan, but also about high technology weapons being used by potential adversaries to disrupt our society in future. We may be members of NATO, the most powerful conventional military alliance on earth, but we are on occasion in danger of allowing this to generate a comforting misapprehension; namely, that our adversaries will in future engage us in conflicts that play to our strengths, not in unconventional conflicts that play to theirs. This is dangerous thinking.
	When the headlines on the SDSR have faded, and the short-term budget battles are over, sober judges will ask not only what we cut but what we invested in. The real test will be whether we have invested to meet the challenges of tomorrow rather than those of yesterday.
	As imminent as the publication of the defence review is that of NATO's strategic concept. That presents an opportunity to address the issue of NATO-EU co-operation. I look forward to the contribution from the Minister in the hope that she will give us some indication that the Government will regard as a priority the issue of our contribution not just to the conclusion of the review of NATO's strategic concept, but to the important communiqué that will follow it and to the summit meeting that will take place in Lisbon.
	My final point may arise from my professional prejudice, but is none the less valid. One major issue that needs to be addressed in the cyberdomain is the role of the law, both domestic and international. Domestically, RIPA was drafted before the internet developed into what it is today. Our law needs regular review to ensure that it keeps up with the rapid rate of change that we are witnessing. In particular, we must find ways of making detection and prosecution easier. Internationally, in the absence of sufficient treaty law or UN statutes dealing explicitly with cyber actions, urgently we need to define the role that international law should play in covering either offensive or defensive cyber actions. I should be grateful if the Minister, who speaks for the Government and who we all know has expertise in this field, will reassure your Lordships' House that action in these fields is contemplated and will give some indication of the steps that we can expect to see in this regard.
	In closing, I express my gratitude for the warmth of the welcome that I have received in your Lordships' House. In particular, I thank the staff of the House who, with unfailing courtesy and genuine kindness, have eased my transition in a way that has made me feel as welcome here as anywhere I have ever been in my life. On the day of my introduction, the courtesy and kindness that were shown to my family and guests left them with the most positive impression that will remain with them for the rest of their lives. I trust that, with these words, I have observed the conventions of the House. I respect them immensely and I look forward to engaging in debate across a wide range of subjects, almost certainly learning more than I will ever be able to contribute.

Lord Hannay of Chiswick: My Lords, it is a genuine pleasure to have the task of following the distinguished maiden speech of the noble Lord, Lord Browne of Ladyton, and giving him the very warmest of welcomes. I first met the noble Lord just over a year ago when we were both members of the cross-party group that went to Washington to discuss issues of multilateral nuclear disarmament. Over our three days there, he displayed three qualities: a sense of humour that survived even a bruising encounter with Senator Jon Kyl, no friend of disarmament of any kind; affability; and the capacity to address even the most complex and technical subjects-and they do not come much more technical and complex than nuclear disarmament and cyberwarfare-in comprehensible and compelling terms. All these qualities were demonstrated today in his maiden speech. He will be a timely reinforcement to the group of former Defence Secretaries and military men in the House whose skill and experience will surely be of value when we come to address the coalition Government's defence and security policy review, due out next week. He will bring the same qualities to discussion of the issues of multilateral nuclear disarmament, to which he has already made a notable contribution as founder and convener of the top-level all-party group set up to match here the advocacy in the United States of Messrs Shultz, Kissinger, Perry and Nunn.
	It can be said with a tolerable degree of certainty that this is the first serious full-scale debate in this House, or indeed in this Parliament, on how best to face up to the threat from cyberattacks. However, it will not be the last, because the target against which that threat is directed-our society's increasing dependence on sophisticated forms of electronic communications-is continuing to grow at a frantic pace which shows no sign of slacking; because that is a worldwide phenomenon which increases the vulnerability of every country in the world; and because the target, as it grows, is likely to become softer unless effective countermeasures and increased resilience can be devised.
	To believe that that target will not be at risk in circumstances of heightened international tension or open hostilities would be a triumph of hope over experience. Therefore, this report is surely a timely one-a very necessary reminder of the need for sustained effort at the national, European and wider international levels if we are to deal with that vulnerability. I pay tribute, in particular, to my predecessor as the chair of the sub-committee which produced the report, the noble Lord, Lord Jopling, for the masterly way in which he guided our deliberations and shaped our report, and for his introduction to this debate.
	First, I shall say a word about the scope of the report. We were guided, as we had to be, by the EU document that we were examining. That document limited itself to cyberattacks. It did not, therefore, cover cybercrime at all and so nor does our report. However, cybercrime is already a massive enterprise. As usual, the criminals have moved more rapidly to capitalise on the opportunities offered by technological advances than the law enforcers have developed ways of frustrating them and bringing them to justice. Therefore, the scale and nature of the problems faced by us and by other states are a great deal larger and more complex than those that are covered in this report.
	This new threat from cyberattacks, which is covered in the report, is in almost every way quite different from most other threats that we have faced, and so will need to be our response. If it resembles any other threat, it is perhaps closer to the one that we faced from nuclear weapons in the early years after their discovery, when we did not have a clear idea of what response would work best and whether deterrence would be effective. I am indebted for that analogy to Professor Joseph Nye of Harvard, whose paper, Cyber Power, was published in May of this year and which I commend for its clarity of thought.
	Of course, that analogy is not exact-analogies never are. But just as the doctrine of mutually assured destruction has driven us back towards serious work on nuclear disarmament, the realisation that massive retaliation against cyberattacks could well be a cure worse than the disease, risking bringing the whole or large parts of the internet system down in its wake, should push us in a similar direction. The asymmetry of threats from nuclear weapons in the hands of terrorists, which makes nonsense of earlier deterrence doctrines, is matched in some ways by the inherent asymmetry of threats from cyberattacks, where state origin is so easy to conceal, as we have seen in the cases of Estonia and Georgia, and perhaps now in the case of the Stuxnet attacks on Iran.
	This analysis points, as does our report, to the need for a much intensified international dialogue between the main players-the US, the EU and its principal member states, of which the UK is one, China, Russia and a few others-about how best to understand and how best to counter the risks from cyberattacks. Out of better understanding could come better countermeasures and less reliance on what may prove to be faulty doctrines of deterrence. Would all this lead on to international agreements or treaties, or, rather, would it consist in a system of close consultation and confidence-building measures? I suspect that it is too soon to say. Much will depend on the willingness of the main players to work together and to recognise a common interest in avoiding cyberattacks. After all, every cyberattack, however well concealed in its origin, begins in some state's jurisdiction. The willingness of states to act in a co-operative manner is, therefore, crucial. I hope that the Minister will feel able to respond to that analysis when she replies to the debate.
	Apart from these wider international considerations, our report focuses naturally on the EU dimension. Here both the report and the Government's very constructive response reveal much common ground. Although national security remains a national responsibility, the UK has an important interest in strengthening the resilience of all 26 member states against cyberattacks and some of them are clearly not well prepared at all. As a member state which is better prepared than most, we could and should play an important role in strengthening overall resilience. After all, these are our biggest markets and our most integrated partners and there should be an opportunity for the UK to play a leading role. It was a welcome sign that all our Commission and ENISA witnesses, as well as those from outside Government, seemed to share that analysis and to welcome a very active British role. I hope that the Minister will confirm that we will do just that; we will do what we can to make Europe-wide training exercises and the testing of systems a real success.
	On ENISA and the possible widening of its mandate in the review of its activities which is now taking place, I thought that there was a rather grudging tone in the Government's response, which perhaps is a reflection of financial concerns. But using ENISA to strengthen the European response to cybercrime would surely make sense. Cybercrime does not stop or start at our borders. Weak handling of it elsewhere in the EU will impact negatively on us too, so I hope that the Government will think again about that and will take a positive attitude towards an extension of ENISA's mandate. Of course, the siting of ENISA in Heraklion should never have happened and it would be good if the Government would confirm that that sort of aberrant decision will not be repeated. All the evidence that we received indicated that ENISA was valued by practitioners and was rated as doing a good job, so the case for putting it to better use would seem to be quite compelling.
	In conclusion, I would like to pay tribute to the previous Home Office Minister, the noble Lord, Lord West, who is not in his place, and whose evidence to the committee was frank and valuable. We look forward to maintaining that relationship with his successor; I hope that the noble Baroness will keep the Committee closely informed of developments in this area of EU activity. We look forward to taking evidence from her when the occasion justifies it.

Lord Mackenzie of Framwellgate: My Lords, I congratulate my noble friends Lord Reid and Lord Browne on their powerful contributions to this debate, which augur well for the future of the House. I also thank the noble Lord, Lord Jopling, for his chairmanship of the sub-committee, of which I am a relatively new member, and for securing this important and timely debate in your Lordships' House. His stewardship and guidance were models of how an inquiry should be chaired.
	Cybercrime is a growing threat to us all. In my experience, the criminal fraternity will always find new ways to achieve its objectives by harnessing new technology and resources to try to outwit the forces of law and order. Every week, we read of new fraudulent scams to relieve the citizens of Europe, and the world, of their hard-won savings or the use of the internet to groom and subsequently abuse our children. We also hear of new squads being set up by law enforcement agencies to deal with those threats. Indeed, as has been mentioned, we heard only this week from the head of GCHQ that the Government are the target of a thousand malicious e-mails each month. Of course, that figure is increasing in line with the growth of the internet by some 60 per cent each year. It follows that these criminal entrepreneurs-that is what they are-will be recruited by intelligence services of ill disposed foreign powers to penetrate the computer systems of the liberal democracies, epitomised by the European Union countries, either to obtain secret intelligence or to damage defence systems or the basic infrastructure, which we take for granted, of the country being attacked.
	We all get unwanted e-mails. I will always remember that, a few years ago, when I first came into this House, there was a debate on spam messages in your Lordships' House. I recall a very elderly Member of your Lordships' House, who is unfortunately no longer with us, rising to berate the Government of the day for doing nothing about them. He said: "They are always advertising the same products: body enhancements, Viagra or inkjet cartridges". He finished by saying indignantly, "My Lords, do I look like a man who requires inkjet cartridges?".
	Our inquiry heard evidence from a number of individuals and organisations, but it is fair to say that we were disappointed by the response to our call for evidence. None the less, we should thank those who responded and gave time to assist us in our deliberations. I am pleased that the Government's response is broadly in agreement with the committee in its criticism of the Commission. Through our examination of specific examples of cyberattacks or disasters, it became evident that, although major disruption can be caused, Great Britain is indeed a leader in Europe in dealing with such disruption; others may well follow.
	If the EU is seen as a club, the club rules should set standards for dealing with cyberdisruptions or attacks that all member states should aspire to uphold. We are only as strong as our weakest link. Unlike the European Union and the states within it, the internet has no borders and, in a global economy, with multinational corporations using the internet for business, it is imperative that we have a global response to large-scale cyberattacks or disasters. The development of international rules that are properly policed would deter some countries from turning a blind eye, for whatever reason, to such attacks from within their borders.
	The Commission communication was therefore a little disappointing in its lack of global response to the growing threat. To attempt to bring down a nation's communications system, transport or banking structure is tantamount to an act of war and it would be legitimate for an organisation such as NATO to be brought into play. Not only would that be using the collective wisdom and resources of the alliance countries, but it would act as a powerful deterrent, as it has to conventional threats. The Commission report was almost silent on that. There may be some value in holding joint exercises in that area to reinforce the essential need for more co-operation among NATO countries. In my experience, it is essential for member states to carry out exercises in this area to enable them to participate more fully in future joint efforts.
	The European Network and Information Security Agency, ENISA, has been mentioned. It is an important body and exercised the committee greatly, because policing the internet and dealing with criminal enterprises in this area is important. It is to be hoped that the resources can be found to reinforce ENISA so that it can extend its role. Needless to say, I am rather disappointed once again with the lukewarm response to the committee's recommendations, which seems to raise doubts about the existence of the agency. Perhaps in reply the Minister could give us further assurance on that.
	Cybercrime and terrorist attacks are a fascinating subject and I have little doubt that they will exercise us in our deliberations in the months and years to come. As we used to say in the police service, the six "p"s apply: proper planning prevents pretty poor performance. I hope that our deliberations in this area add value to planning to prepare to deal with these matters before they happen.

Viscount Waverley: My Lords, I apologise for rising in the gap. One aspect of today's debate that could be usefully underlined is the need to ramp up co-operation with countries and regions where we have strategic interests and which are themselves at risk, whether because of direct interests in energy supplies, for example, or indirectly through narcoterrorists funding a low-cost cyberattack capability, which would be cheap in relation to the mayhem that can be caused. The central Asia and Caucasus region contains ever growing strategic infrastructure that one way or another does or will serve Europe. The Baku-Ceyhan pipeline is one example. It is doubly more pressing as it is in exactly this region where, some say, the majority of cyberattacks originate.
	Two immediate difficulties exist: resources within those regions to counter the problem and the lack of sufficient exchange of information among intelligence communities as a result of insufficient in-depth bilateral co-operation. I hope that an immediate effect of the Foreign Secretary's visit to Moscow will be closer co-operation among our respective intelligence communities. That, in turn, would lead to Russia ceasing to apply pressure on opposite numbers within central Asia and the south Caucasus to be unco-operative with western interests. It should be remembered that central Asia and the south Caucasus are, after all, Russia's backyard. The noble Lord, Lord Browne, mentioned Lisbon. Can the Minister inform us whether Russia has now agreed to attend? That country must be included in debate on international affairs. To improve the situation immediately, I urge the Minister to encourage the sending of representatives at Secretary of State level to Kazakhstan's December heads of state OSCE summit in Astana, with a possibility of a one-day or two-day extension for bilaterals. This would be viewed as the United Kingdom working for mutual benefit.
	I listened carefully to the remarks made by the noble Lord, Lord Jopling. The committee and the Home Office appear to agree that cybersecurity is a global phenomenon and requires globally co-ordinated action. The EU appears to be on track in combating the threat of cyberterrorism with its ENISA proposals of 30 September. However, more should be done on basic concepts and on a mid-term to long-term strategy, particularly in regard to an integrated approach including all major players. The Minister could be encouraged to ramp up the debate and implement initiatives at at least G20 level.
	In conclusion, a simple analogy to reinforce the case for global endeavours is to compare the threat of cyberterrorism to the threat of the banking sector. We now know that one bank failing can have a catastrophic global impact. The same can apply to the world of cyberterrorism. I do not wish to appear alarmist, but I fear that, whereas suicide bombings have been the weapon of choice in certain quarters, carefully targeted cyberattacks will be the weapon in tomorrow's world.

Lord Rosser: My Lords, I am the final warm-up act before the much referred to and much awaited speech by the Minister. I wish to add my thanks to those already expressed to the noble Lord, Lord Jopling, for the work that he and his sub-committee have undertaken in producing such an informative report into a subject of ever increasing importance and concern. Those concerns have been reflected by every Member of your Lordships' House who has spoken with authority in this debate. I also congratulate my noble friends Lord Reid of Cardowan and Lord Browne of Ladyton on their, as anticipated, impressive and thought-provoking speeches, which gave us the benefit of their considerable and real expertise and knowledge in this field.
	The noble Lord, Lord Jopling, in his helpful and informative opening speech, drew attention to the key findings in the report, including the issue of the part that the European Union can usefully play in protecting Europe against large-scale cyberattacks. It was certainly of some comfort to read that the committee did not feel that this was an area where our Government, in relation to our own country, were being complacent. As the noble Lord, Lord Hannay of Chiswick, said, the witnesses from whom the committee took both oral and written evidence generally thought that the United Kingdom had sophisticated defences compared to most other states.
	To quote from the report, the European Network and Information Security Agency, referring to mechanisms for dealing with internet incidents, had stated that,
	"the UK, along with a limited number of other Member States, is considered a leader in this area with developed practices that set benchmarks for others to adopt".
	Continued vigilance and development will be necessary to ensure that that continues to remain the case.
	There has, of course, been a change of Government since the report was concluded. While we have read their written response, I hope that we will hear more from the Minister when she responds about the views of the new Government on the report and the serious issues it raises, and the extent to which the Government do or do not agree with the stance adopted by the previous Administration in their evidence to the sub-committee. In their reply of 6 July 2010 to the report, the Government state:
	"While we are in agreement that cyber security is a significant and increasing facet of national security, the present Government is in the process of reviewing whether there are things we can do better or differently to achieve the same national security goal; that this is likely to extend to the European Union".
	It would be helpful if the Minister could explain what that statement in the Government's reply to the report means in practical terms. When did the review start? Who is undertaking the review? When will the review be complete? Will its findings be made public? What "things"-that is the word that the Government use-are being looked at to see if they can be done better or differently to achieve what is referred to as the "same national security goal"? Finally on that paragraph, what exactly is it that is,
	"likely to extend to the European Union"?
	A number of UK organisations and bodies with independent expertise are referred to in the report and in the Government's response. Will the Minister confirm that these bodies will survive the forthcoming cull?
	In their response, the Government say that they will remain actively involved in the discussions under way at the European level on the role for the European Union and that they support the committee's recommendation that this should be focused on the promotion of best practice and on reducing the gap between the most advanced and the less advanced member states. As has been said on more than one occasion today, cyber does not recognise national or European Union boundaries but is also a global threat. We need our international partnerships and alliances, since we have common interests with other responsible nations in sharing information on threats and vulnerabilities.
	The Government recognise that the prevention of cyberattacks has an important international dimension. They state:
	"In developing a new cyber security strategy, the Government is putting significant resource into having a strong and proactive role in this".
	What are the objectives of this new cybersecurity strategy that it is felt may not currently be being addressed or need updating? Is it part of the "process of reviewing" referred to in the third paragraph of the Government's response, to which I referred earlier?
	The importance of this debate and the importance and relevance of the committee's report has been further enhanced in the light of the speech the other day, to which the noble Lord, Lord Jopling, referred, by the director of GCHQ on cybersecurity. He said, as did the committee in its report, that this was not solely a national security or defence issue but went to the heart of our economic well-being and national interest. The committee's report, as the noble Lord, Lord Jopling, highlighted, gives examples of cyberattacks that have occurred which seek to strike at the heart of a country's ability to function. The GCHQ director added further weight to this point in relation to our own country when he said that the threat of cyberattacks to disrupt seriously critical national infrastructure,
	"is a real and credible one".
	He also said that:
	"There are over 20,000 malicious emails on Government networks each month, 1,000 of which are deliberately targeting them ...that we have seen the use of cyber techniques by one nation on another to bring diplomatic or economic pressure to bear ... we have seen the theft of intellectual property on a massive scale, some of it not just sensitive to the commercial enterprises in question but of national security concern too ... and that the risks in all these areas are growing along with the enormous growth of the Internet. At the moment it's expanding by about 60% a year".
	This includes growth stimulated by the Government as they seek to get services online, not least in response to an increasing public expectation that services will be available in this way. The expectation is that within the next few years, online tax and benefit payment systems could be processing over £100 billion-worth of payments at a time when the increasing cost of e-crime to the economy runs into billions of pounds and organised groups attack not just commercial targets but also online tax systems across Europe.
	The GCHQ director commented that cyberspace is contested every day, every hour, every minute, every second, and that he could vouch for that from the displays in his own operations centre of minute-by-minute cyberattempts to penetrate systems around the world. He went on to say that:
	"Ministers are looking, in the context of the Strategic Defence and Security Review and the Spending Review, at what capabilities the United Kingdom needs to develop further",
	and added that:
	"Clearly they will also be deciding how they trade off against other spending priorities".
	Perhaps the Minister could answer the question that the director in effect posed-namely, how high a priority compared with other spending priorities does this Government give to providing the necessary resources to ensure that this country continues to be protected effectively from cyberattacks?
	I conclude by congratulating the noble Lord, Lord Jopling, and his committee on a thorough, thoughtful and informative report which has rightly raised the profile of this important and, indeed, worrying issue.

Baroness Neville-Jones: My Lords, I join other Members of the House in thanking my noble friend Lord Jopling for introducing this debate and for his committee's report. It has enabled us to have what I think has been a rather wide-ranging discussion of the issues. He rightly said that it is one of the first extensive debates we have had on cyber generally and, in particular, on cybersecurity. I join noble Lords in welcoming the two noble Lords who made their maiden speeches and say how valuable their comments have been. We look forward to further discussions, and no doubt we will be talking about this subject in the future. I think that we have a House that has a considerable contribution to make, and our new Members have certainly increased our capability.
	I should also like to point out that the noble Lord, Lord Reid, set up the Office for Security and Counter-terrorism in the Home Office which continues to function to this day and plays a central role in counterterrorism generally, while cybersecurity impinges on it. As everyone knows, capabilities for cyber are located mainly in the Cabinet Office, and indeed it was my predecessor the noble Lord, Lord West, under whom the Office of Cyber Security and the Cyber Security Operations Centre came into being. They have provided a central capability in government for the first time, and the Government are building on those structures. I pay tribute to our predecessors for starting down this road; we intend to contribute and to build on it. There is no doubt that the saliency of cybersecurity is increasing greatly.
	The first thing we did in the Office of Cyber Security was to make a small but significant move in joining the strategy of cybersecurity and information assurance together. It seemed to us that these were closely related subjects and that it made no sense to keep them separate. Information assurance-which is provided not only by patching but also by people-is a key element in increasing our level of security. In his speech yesterday, the director-general of GCHQ Cheltenham said that we could deal with 80 per cent of our vulnerabilities if we increased good practice. Obviously good practice, to a significant extent, comprises keeping up systems and ensuring that they remain as invulnerable as possible. This also depends upon the human element. It is extremely important that if the Government purport to take a lead in this area-which I believe they should-they should themselves be an example of good practice. So one of the things we will do is increase the emphasis inside government and preach the message of information assurance nationally as being a contribution we need.
	One element which has not been mentioned, but which we regard as an integral part of national security, is that we should increase capability in the population as a whole and encourage the use of good practice by ordinary users of computers. Indeed, we should up skill our population and, in particular, the level of expertise that we will need in the future for both maintaining and developing systems. We do not have enough people. A major contribution should come from the academic community, and the Government will certainly support that. I know that the noble Lord, Lord Reid, has a strong interest in that area. It would be a valuable contribution if a good deal were to be said about these subjects; we need someone to talk about them and we should keep them in our minds all the time. This would be a way of incentivising younger people to enter what is and will remain an exciting and expanding domain.
	In referring to the SDSR, I am rather constrained by the timing of the debate. In one sense it is very good because it comes at a moment when we are thinking about this subject; unfortunately it comes just before the publication of the SDSR and I am unable to say everything that I would like to. However, I should like to give an indication of the direction of our thinking.
	A number of important points were made-including by the noble Lord, Lord Browne, who made the key point that the nature of conflict is changing. Although this certainly applies to the battlefield, in a sense, it also applies to society. There is no such thing as a valid distinction of any real kind between how we deal with the threats and challenges to our country abroad if we do not also deal with them at home. Conversely, in order to diminish their significance and threat to us at home, we need to act abroad-the so-called upstream. In this, cybersecurity is key to our military capabilities on the battlefield and to our navy. It is no good having your carriers protected by your frigates and your submarines if the whole shooting match has lost its communications; it is dead in the water. Similarly, at home, we will not succeed in defeating a cyber-enabled terrorist enemy if our own communications are vulnerable. We need to be able to disrupt them, not them to disrupt us. This is the new national frontier. It offers very exciting, interesting and intellectually challenging opportunities for younger people and it is of great import to the nation.
	National security is a totality of security, whether at home or abroad, and cyber is a central element in it. Though I cannot unfortunately give detail, I hope that the House will agree when it sees it that we have given due prominence and priority to the cyber element of our strategy.
	Iain Lobban laid out the threat-I shall not repeat what he said, because it was put extremely cogently as well as accurately. However, the threat has a number of elements. There is indeed the threat of state-led espionage, which is theft by states. They are out for our valuable intellectual property, which they can then use for their own ends and possibly turn against us. This is a serious threat. We have also the activities of the non-state actors, who use cyberspace as an enabler. It is our task to disrupt them, too. In both cases, as has been said, you have real difficulty of attribution and, correspondingly, difficulty in knowing how to respond. We need to work on the issue of attribution, because, if we do not, we will never succeed in having a sufficient volume of successful prosecutions to act as a deterrent. However, we should recognise that attribution is quite difficult and that there are other things that we need to do at least at the same time but preferably earlier because they are within our domain. That constitutes better defences, better deterrence and the capability for counterdisruption. We need to be able to patrol our frontier.
	There is a feature of patrolling our frontier which is very simple but which points up some the difficulties that we face. When I visited the NSA, it was said to me that relatively few practitioners and security officers in large corporations, and even in corporations which are internet providers, know what the configuration of their system is when it is operating normally and according to the rules. So if you do not know what it should look like when it is operating according to its own rules, you are most unlikely to spot when there is anomalous behaviour. But spotting anomalous behaviour is your first line of defence. We keep on coming back to the need for those skills.
	It is a feature of modern, strategic national security thinking that, very quickly, the strategic descends to the nitty-gritty of operation, because you cannot succeed in your strategy unless you go right down into the weeds. It is one of the more difficult parts of the challenges that we face and it is certainly the case in the cyber area.
	Clearly, another part of our approach has to be a focus on closing our vulnerabilities. The issue of our approach to the law was raised. We need to bring in law enforcement. I am more cautious about the question of operating within legal frameworks when it comes to trying to regulate the international scene. That is not to say that we can never have a valid convention. Certainly, the idea that we could have a convention that gives us the rules of the road instead of simply codes of conduct is an extremely attractive proposition. But you have to be confident of two things. First, that those who sign conventions will actually then obey their precepts and not seek to go outside them while you observe the rules. Otherwise, you are putting yourself at a disadvantage. Secondly, in that situation, you need to be able to ensure that you can verify what they are doing. It adds to your vulnerability when you have people signing up who may not be entirely trustworthy.
	With the old-fashioned, legitimate arms control that I and many noble Lords grew up with, you could go out and verify how many missiles you had because you could count them. This is more difficult. We return to the problem of attribution. I am cautious about the notion that conventions in so immature an area would serve our interests. I am keener on the notion that we seek to close our vulnerabilities and ensure that we defend ourselves adequately nationally. We must also propagate best practice among others who are linked to us and who may be less well equipped. I will come in a moment to international co-operation.
	Another part of our strategy is dealing with crime. The noble Lord, Lord Harris, asked whether we are doing enough and the answer is no. We are not doing enough and we have to up our act. We heard that from Sir Paul Stephenson, in terms, a couple of days ago. We have not yet taken a decision on precisely what will happen to the e-crime unit and the position it will have in relation to the National Crime Agency. However, I can say-and I mean this-that it has to be and will be a priority. This sort of crime is theft. It is plain stealing. There is no such thing as victimless crime. People who suffer a major wipe-out through the swiping of their identities can have the greatest difficulty in getting their money back and in establishing their credentials and their financial position again. These are big issues. That is one side of things. We do not know the figures. The potential losses and the span of brackets that we have for the estimates show us that frankly we do not know the full costs because we have very little handle at the moment on the level of losses. It is certainly true that government agencies are becoming rather more conscious and getting a better handle on what they may be losing. As a matter of economic cost to the nation, we are still a long way from understanding exactly what is happening.
	Focusing resources on detection and on international co-operation is a crucial part of following any crime chain and this is a classic area where there is international contact and an international link. There are a few big scams and crimes that do not have a significant international dimension. An attack that takes place in the United Kingdom could originate in another country, so you cannot bring people to justice without the help of others overseas. The answer is that we are barely at the starting gate and in this whole area the House will agree that we are still doing baby steps.
	Points were raised in the debate about the vulnerability of our critical national infrastructure. Our predecessors in office did a great deal of serious work in this area but there is still more to be done. The NPIA-I am not sure that I have got that acronym right, but I mean the agency with responsibility for protecting the national infrastructure, which is the office that springs from the Security Service-has a powerful relationship these days with a number of the really strategic elements in the national infrastructure and gives advice. It has helped infrastructure operators to upgrade their performance.
	That brings me to one of the major points that I wish to make. I was asked whether we are doing well enough in these areas. I do not think that we are doing badly, but there is clearly more to do. One thing that absolutely stands out when you start to think about cyber is, while the Government must take the lead, where the responsibility will lie. It will lie with the Government, including ensuring that we retain our national capabilities. But we are clearly not going to be able to have an effective national platform, which not only protects the operation of our society but gives us economic advantage internationally, so people decide to invest in the United Kingdom because they know that it has secure communications that they can trust, except in partnership with the private sector. By that I mean not simply getting the private sector to pay or do what we want; I mean a partnership, and developing policy with the private sector. We need to do it at the strategic level, with the direction in which we need to go, and we need both a general and a sectoral approach. We go back to the fact that the strategic level descends extremely quickly to the operation consequence. We need to have a partnership that does both strategy and operational co-operation, whereby the Government's technical expertise can be brought to bear to help to ensure that private sector operators and companies have the cybersecurity that they and the nation needs for business continuity.
	I am trying to paint an approach on the part of Government that is perhaps holistic and which takes all the issues and tries to put them together. We are further ahead in some aspects than others, and when we are not so far ahead we need to catch up. I hope that we have at least analysed what we need to do. There is a significant road to go down.
	The noble Baroness, Lady Hamwee, asked about the role of the media, which gives me the opportunity to say something about an important aspect. The media are important as they are our means of communication in these issues. They are also absolutely vital to government in an emergency. One thing that we need to be able to do and which we will do is to exercise-and everybody who has been in government knows just how important exercising is. That goes right across the board. One thing that you come across when you start is that you can conduct very few exercises without the electronic and cyber element being an extraordinarily important part of getting through. Making sure that in and of itself we are testing our cyber capabilities and our vulnerabilities is an important part of underpinning other forms of exercising that we do for emergency prevention and preparation.
	I was asked about the role of ENISA and the Government's attitude to it. There is no doubt about the Government's support for the continuing operation of ENISA. Its life has not been made easy by putting it in Heraklion, and one could perhaps wish otherwise. I gather that the Greek Government are putting in place some facilities in Athens, which will make it a bit easier for people to get there. It is probably fair to say that they have managed to recruit the staff, although they have not made it easy for ENISA staff to travel. But those who know the Union do not think that it is likely that we will be able to change that, so I think that the fact that there are some offices in Athens is probably the way to build. As for its role, we agree that it has done good work. It is a very small agency with a not very big budget. It is being proposed now that it should have quite a significant increase in its budget. Our view of that is: "Give us the reasons why-a justification. We actually want to see what you think you would do with it". We agree that it potentially has useful roles in the area of crime prevention and of linking up, in the cyberarea, the role of other enforcement agencies such as Europol, and of making them more powerful and effective.
	ENISA can do what we hope to do in the national security strategy, which is to bring the elements together. That is a classic co-ordination role and an important and valuable one in this area, given that the elements at the moment are so dispersed and that the performance between member states is so highly variable. The whole notion of bringing others up, who are not as operational but who can represent a weakness in the system, is an important part of what can be done for us. Your Lordships may be assured that we take ENISA seriously.
	Similarly, we take NATO seriously. NATO is developing its concept and there is quite a debate going on, as I understand it, about all those things that might fall under the heading of Article 4-the solidarity article, if I can put it that way. To some extent, cyber falls in that area. Personally, I take the view that I would very much like to see NATO active in this area. I gather that the military committee is now beginning a discussion of what NATO might be doing. That is wholly to be welcomed, as is the possibility of NATO-EU co-operation in this area. We all know that there are bigger issues-or, at any rate, other issues-that prevent that from happening, which are wholly contrary to the interests of the member states of both organisations and the organisations themselves. That is one thing that we have not yet succeeded in cracking.
	There is also almost certainly a division of responsibility to be found between the two organisations. Your Lordships will be aware that-and we are not alone in this-we do not particularly wish to see the EU get into things labelled "national security", although I have taken the view that national security is, rightly, rather a big term and that there will be things that the EU can undoubtedly do to contribute to the success of our collective national security. I believe that NATO will also have a role, which I hope it will seize, because I believe that there are important things to be done, particularly in Europe. That will also strengthen the collective approach.
	I am told that time is up. Indeed, I have come to the end. Implicit in all that I have been saying is what a number of noble Lords have mentioned: we need strong international co-operation in international organisations, just as we need bilateral co-operation between the competent agencies.

Lord Jopling: My Lords, as we come to the end of the week's business, I shall delay the House for only a very short time. First, let me say how grateful I am, as I am sure the committee will be, for the kind and generous remarks made to me and about the committee's report. I think that I have heard no criticism at all of the report; indeed, there has been generous approval of it. There is no doubt in my mind that this topic-cyberwar or cybercrime, whatever it be-will recur fairly regularly in our discussions in this House. I was particularly glad to hear the Minister saying that we need to talk about it and I hope that we shall.
	The contributions today demonstrate that there is a good deal of expertise on this issue lurking within the House. That brings me particularly to the two maiden speakers, the noble Lords, Lord Reid of Cardowan and Lord Browne of Ladyton. I spoke earlier about our anticipation of their speeches. They have given us an example both of the broad view of this problem and of their great expertise, having been Defence Secretaries in the past. We are most grateful to them and we look forward to hearing them both regularly on this and other issues in future.
	I thank the Minister for her comprehensive summing up. I was particularly pleased to hear, in the latter part of her speech, what she said about ENISA and NATO. I have probably said enough at the end of this debate, except to say that I beg to move.
	Motion agreed.

House adjourned at 7.06 pm.